stronger sharper smarter
Hathway Cable and Datacom Limited 60th Annual Report 2019-20 What lies ahead…
01 Corporate Information 02 Stronger. Sharper. Smarter. 04 Strategic Communiqué from the MD 06 Transforming to Grow 12 Leveraging Strengths to Grow Stronger 16 Powering Efficiencies to Become Sharper 20 Expanding Outreach, the Smarter Way 24 Stronger Efficiencies. Sharper Focus. Smarter Growth. 28 More Ahead 29 Mapping the GTPL Hathway Performance 30 Notice 41 Directors’ Report 56 Management Discussion & Analysis 64 Report on Corporate Governance Standalone Financial Statements To download or to read this 88 report online, please log on to Consolidated Financial Statements www.hathway.com 154 Corporate Information
BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER COST AUDITORS Mr. Sridhar Gorthi Mr. Sitendu Nagchaudhuri Ashok Agarwal & Co., DIN: 00035824 Cost Accountants Chairman and Independent Director HEAD CORPORATE LEGAL, COMPANY SECRETARY AND INTERNAL AUDITORS Mr. Sasha Mirchandani CHIEF COMPLIANCE OFFICER Group Internal Audit Cell, DIN: 01179921 Mr. Ajay Singh Co-sourced with Chartered Independent Director FCS No.: 5189 Accountancy Firms
Ms. Ameeta Parpia REGISTERED OFFICE ADVOCATES AND SOLICITORS DIN: 02654277 “Rahejas”, 4th Floor, Corner of Main Trilegal (Mumbai) Independent Director Avenue & V. P. Road, Santacruz (W), S. Mahomedbhai & Co. (Mumbai) Mumbai - 400 054. M/s. Dua Associates (Mumbai) Mr. Akshay Raheja Tel No.: (022) 26001306; DIN: 00288397 Fax No.: (022) 26001307 BANKERS Non-Executive Director CIN: L64204MH1959PLC011421 Axis Bank Limited HDFC Bank Limited Mr. Viren Raheja CORPORATE OFFICE ICICI Bank Limited DIN: 00037592 805/806, Windsor, 8th Floor, IDFC FIRST Bank Limited Non-Executive Director Off CST Road, Kalina, Santacruz East, IndusInd Bank Limited Mumbai - 400 098. Kotak Mahindra Bank Limited Mr. Saurabh Sancheti Tel No.: (022) 67742500; RBL Bank Limited DIN: 08349457 Fax No.: (022) 67742400 Yes Bank Limited Non-Executive Director Website: www.hathway.com Email: [email protected] REGISTRAR AND TRANSFER AGENT Mr. Anuj Jain Link Intime India Private Limited DIN: 08351295 STATUTORY AUDITORS C-101, 247 Park, LBS Marg, Non-Executive Director Nayan Parikh & Co., Vikhroli West, Mumbai-400083 Chartered Accountants Tel: (022) 49186000; Ms. Geeta Fulwadaya Fax: (022) 49186060 DIN: 03341926 SECRETARIAL AUDITORS Website: www.linkintime.co.in Non-Executive Director Rathi and Associates, Company Secretaries Mr. Rajan Gupta DIN: 07603128 Managing Director CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
The world is changing, and so are enterprises. Constantly embracing new ideas, continuously adopting breakthrough technologies and consistently adapting to the fast-paced transformations, businesses today are getting bigger, better and more efficient. Employing the core of their capabilities and capacities, they are powering unprecedented changes across functions to connect more deeply with their customers. REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
At Hathway, too, we are in the midst of change. Transforming across the organisational fabric, we are progressively strengthening our business proposition to enhance our customer interface. Through a slew of initiatives, we focussed further on augmenting our operational and cost efficiencies during FY 2019-20, as we accelerated the shift towards a more sharply defined Business-to-Consumer (B2C) strategic approach. Leading this change were our energised efforts to harness the new opportunity landscape unleashed by the New Tariff Order (NTO) regulatory regime, as we moved proactively to address the evolving needs and aspirations of customers more efficaciously. Further being part of the Reliance Group now, has also ushered in greater competencies and capabilities to propel the Company’s quest to become a Stronger, Sharper and Smarter entity. CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Strategic Communiqué from the MD
Dear Valued Shareholders, The transformational wave, unleashed in the Indian media and telecommunication industry in the previous fiscal by the NTO regulatory changes, growing competitiveness, market consolidation and new techno-digital interventions, witnessed Aligning ourselves with speed and agility to these a further strengthening fast-paced changes, and seizing the momentum that we had built in FY 2018-19, we, at Hathway, focussed during during FY 2019-20 amid FY 2019-20 on reinforcing our service charter to drive greater efficiencies. The overarching goal of our efforts was a challenging business to achieve bigger and smarter growth in a more transparent landscape. The NTO- environment, with customer-centricity driving our strategic driven paradigm shift in TV plans in the new order of things. consumption culture saw a Moving aggressively to implement the NTO through strategic reorientation of our business model, we put into motion a new level of broad-basing, series of initiatives during the year in review. These were even as online content aimed at further streamlining our systems and processes, and boosting their efficacy in the new regime. Cumulatively, consumption continued these measures will help increase satisfaction for both, our to grow phenomenally to Local Cable Operators (LCO) partners and end customers, eventually translating into sustained increase in revenue, boost demand for high profitability and market share.
speed connectivity through We also delivered a strong set of operating and financial fixed Broadband. results for FY 2019-20.
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We are proud of our team that has been prudent in financial management and undertook the necessary actions in these As we gear up to sharpen the unprecedented times towards increasing revenue, controlling contours of our transformed costs, optimising Working Capital and Capex, and improving strategic framework, our endeavour overall financial performance. will be to utilise the levers of technology and digitalisation even Our efforts to enhance our operational efficiencies got a more vigorously to further enrich further infusion of energy after the Board of Directors of the customer experience. Company, at its meeting held on February 17, 2020, approved the Composite Scheme of Amalgamation and Arrangement, paving the way for the amalgamation of the Company, along with Den Networks Limited and TV18 Broadcast Limited, into Network18 Media & Investments Limited. We see in this integration the roadmap for further improvement in our business capability and performance, leading to greater profitability through a more cutting-edge B2C proposition.
As we gear up to sharpen the contours of our transformed Though times are tough and strategic framework, our endeavour will be to utilise the unpredictable currently, levers of technology and digitalisation even more vigorously I am confident of our ability to to further enrich customer experience. We shall strive to deliver growth and increase in bring in more and better innovations to enhance customer shareholder value in the coming engagement and empowerment, even as we consolidate the year, as has been demonstrated in best practices and learnings we embraced during FY 2019-20 FY 2019-20. in the post-NTO era.
It will help us to clearly define the way forward for further improvement in our business profile and performance, leading to greater profitability through a sharper customer- focussed strategy, notwithstanding the short-term disruptions to economy as a result of the COVID pandemic.
Though times are tough and unpredictable currently, I am confident of our ability to deliver growth and increase in shareholder value in the coming year, as has been demonstrated in FY 2019-20.
On this note, I would like to conclude by thanking all of you, on behalf of Hathway, for your unwavering support and trust.
Thank You,
Rajan Gupta Managing Director
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TRANSFORMING TO GROW The Evolution of Hathway
One of India’s leading Cable TV and Wired Broadband service providers, Hathway Cable and Datacom Limited (“Hathway” or the “Company”) is a continually evolving organisation that is leading the country’s Cable and Broadband industry transformation. The Company’s transformational agenda is steered by its deep-rooted expertise and experience that enable it to adapt to changes with speed and agility, across segments and functions.
Focussed on engineering change with our industry-leading initiatives and technological prowess, we have, over the years, developed an intrinsic understanding of customer and market needs. At the same time, we are engaged in transforming our own eco-system to make the necessary shift from our conventional Business-to-Business (B2B) approach to the more dynamic B2C model, to effectively address the changing demands of customers in the new business environment.
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Vision To be a single point access provider, bringing into the home and workplace a converged world of information, entertainment and services.
Hathway Cable and Datacom Limited
Broadband Cable TV Strategic Business Business* Investment
Parent Hathway Digital Limited GTPL Hathway Limited [Formerly known as Company (37.32% Equity Holding) Hathway Digital Private Limited] - (100% Subsidiary)
*Cable TV Business includes JVs/Associates/Subsidiaries
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Business At A Glance Hathway’s business is judiciously spread out across its key segments of Cable TV and Broadband, with strategic investment in GTPL Hathway Limited.
Hathway Cable and Hathway Digital Limited GTPL Hathway Limited Datacom Limited (Wholly-owned subsidiary) (Promoter Company and owns 37.32% (Stock ticker - BSE: 533162; stake; Stock ticker BSE: 540602 NSE: HATHWAY) NSE: GTPL)
India’s first Multi System One of India’s largest MSOs, 800+ towns across 12 states Operator (MSO) to offer with a nationwide network of Broadband Internet services on LCOs and subscribers across 10.20 Mn seeded Set-top Boxes pan-India basis regions (STBs)
India’s first MSO to launch Catering to 5.5 Mn Digital Cable 8.00 Mn active Cable TV Gigabyte Passive Optical TV subscriber base subscribers Networks - Fibre to the Home (GPON-FTTH) service 100% Cable TV subscribers 3.33 Mn Broadband home-pass in the country served through Hathway Connect, 80% payment made 405,000 Active Broadband Approx. 5.5 Mn 2-way online by LCOs subscribers Broadband homes passed Cable TV services offered 0.97 Mn subscribers across 350+ cities and major across 16 cities (4 metros and towns across India 3 mini metros) 27 in-house channels
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Augmenting strengths. Delighting customers. Aligning ourselves to the transforming business landscape, we, at Hathway, have pragmatically shifted focus from a pure-play B2B approach to a customer-led B2C orientation. Customer satisfaction and empowerment are the key pillars of our strategic model.
Driving this shift is our strong legacy of expertise and experience, backed by our thrust on technological disruption. The primary objective of this transformation is to ensure greater levels of customer engagement across the portfolio of our unique product and service offerings.
Guiding the realisation of this goal is our powerful nucleus of well-entrenched strengths:
Technological High-end Digital Prowess Infrastructure
Visionary Management Quality-driven Systems & Processes
Qualified & Professional Best-in-class Workforce Equipment
Hathway Cable and Datacom Limited Annual Report 2019-20 9 The world has come a long way from that small television set/computer that had to be carefully placed on a sturdy table in the corner of the room. The big screen has changed the way the world consumes Television and Broadband. It can be affixed to any wall in the living room to deliver larger-than-life entertainment in the comfort of the home. It can also be used, as easily, to increase the monitor size of the computer to boost computing speed and productivity. Amidst this transformation, we, at Hathway, have aligned ourselves to the aspirations and needs of the new-age customers. We have mapped our strategy to create a stronger and more powerful business entity, designed to give customers a more enriching experience, across our Cable TV and Wired Broadband segments. CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Leveraging strengths to grow STRONGER
At Hathway, we continue to chart our business strategy to leverage the transformations taking place across the industry. Led by the unmatched scale, size, content, quality and reach that epitomise our business today, we are pushing the Our strategic frontiers of our growth to touch the lives of our customers in unimaginable ways, which we could not have even visualised approach, during till about two decades ago. FY 2019-20, was guided by two key developments, which propelled our efforts to strengthen our customer connect.
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Scaling growth on NTO platform Our focussed approach, with adoption of new best practices, The transformations in the Cable TV business as a result of has helped improve our relationship with the LCOs and other the implementation of the NTO with effect from February 1, stakeholders, which also brought in greater transparency in 2019, triggered a wave of impactful changes at Hathway. We share allocation of subscription revenues, thereby enabling moved with exceptional speed to keep pace with the scale of mutual profitable growth of all the stakeholders. the explosive NTO-driven changes. We undertook a series of transformational measures to reach out proactively to the Sharpening the edge with Reliance The acquisition of majority stake in Hathway by Reliance end customers, while boosting transparency among the LCOs Industries Limited (RIL) emerged as another strong driver of through our unique Hathway Connect programme. our strategic shift from being an MSO grade B2B system to a Telco grade B2C player. The new level of system and process Realigning our business model to a more sustainable efficiencies brought to the table by RIL will lend to Hathway a approach, we leveraged our technological supremacy to bigger and sharper competitive edge. We believe this will lead deliver many industry-first initiatives, structured to give to the creation of a new legacy, which will enable us to build customers the freedom of choice as mandated by the on our robust foundations to emerge even stronger. NTO. Customer empowerment emerged the key goal of our renewed and refreshed business model, as we surged The development has paved the way for Hathway’s transition forward with increased momentum to launch an extensive into a more customer-oriented organisation. The cultural research exercise aimed at deriving a greater understanding realignment resulting from the acquisition will carve a new of their needs in the new regime. Coupled with inputs tomorrow for our business, in which the customer will play received from the LCOs, we then moved forcefully to a bigger role than ever before in guiding our strategy. package and recommend differentiated customer-friendly Central to this realignment is our people integration, which packs across regions, in order to fulfil the daily viewing we are ensuring through a host of programmes, initiatives experience of the customers. and activities.
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Sharper picture, clearer audio, and a more engaging experience – this is what customers expect today from their Cable TV and Broadband service providers.
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With widespread technological and digital disruptions ushering in a whole new way of consuming Television and Broadband, we, at Hathway, have also scaled up our operational systems and processes multifold. Our game-changing new strategy is crafted to give customers an all-encompassing experience in content and delivery.
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Powering efficiencies to become SHARPER
At Hathway, we have adapted to the technological transitions by further streamlining our systems and processes, making them more seamless and impactful. We have sharpened our technological edge to augment the operational and cost efficiencies of our business operations, thus strengthening our competitive advantage and bringing a new level of resilience to the organisation.
These technological initiatives and upgradations have enabled Hathway to stay ahead of the curve and would keep the Company in good state even in the challenging COVID environment.
Nurturing relationships with Cable TV customers Our focus on using technology to steer our journey of transformation from pure business play to customer-centricity is pivotal to our purpose of continuously enhancing the Hathway services have been experience of our Cable TV customers. It is our endeavour made available on MyJio app, to empower the end customers with the technological edge thus further improving our needed to seize the opportunities released by the NTO, while giving them the unprecedented power to make their service proposition. preferred choice of channels in an affordable environment.
FY 2019-20 witnessed a prolificity of back-end initiatives aimed at deepening our front-facing customer connect. IT enhancements made to manage MyJio and Telecom Regulatory 5-8 times more load – up to 2 Mn Authority of India (TRAI) channel transactions per day selection apps launched to boost customer empowerment Migration of 100% LCO to Online portal ensured Middleware rolled out to enable customers to self-service their Instant real-time activations transactions (with lead time of 15 seconds) and channel selections
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Strengthening the Broadband proposition Cognisant of the criticality of technology to enriching the experience of our Broadband customers, we have also rolled out a plethora of new technological initiatives to deliver our offerings in this segment at their doorsteps.
• Seamless connectivity with speed enables us to provide our customers with quality products and uninterrupted service
• Re-engineering of customer front-ending processes is further driving our operational efficiencies while making our customers tech-enabled
Connecting through quality infrastructure Driving our efforts to continuously enhance customer engagement Speeding to sharpen through technological interventions is our well-established robust and consumption patterns high-end infrastructure. Hathway was the first MSO to launch GPON OPTIC FIBRE CABLE NETWORK with 300 Mbps speed. Seeing massive • Overground: 35,000 Kms opportunity for increasing its market share in • Underground: 500 Kms the deployment of GPON-FTTH and Parallel Network in High Potential High Penetrated • Leased: 4,000 Kms DOCSIS (Data Over Cable Service Interface Specification) home passes, the Company GPON TECHNOLOGY started offering new packs of 200-300 Mbps • Broadband speed up to 1 Gbps speed to its premium customers during • Passive Network (No Power) FY 2019-20. With this, minimum data limits • Voice on Demand (VoD) & related capabilities across the country have gone up to 200 GB/customer/month, with average data Engaging through partnerships consumption of 188 GB per subscriber per Our strong and well entrenched partnerships with leading technology month. The sharpening of the consumption vendors is a key engine of our customer-centric strategy. Our vendor patterns, resulting from our high-speed partners provide us with advanced technology and equipment to Broadband offerings, has enhanced our steer our efforts to enhance customer relationships. Some of the customer connect multi-fold, with the growing high-end equipment we are sourcing from our technology partners shift of Over The Top (OTT) viewing to large are: STBs - Standard Definition (SD) & High Definition (HD), screen further amplifying our high-speed Headend, Compression System, Modems, GPON, Conditional Access Broadband offerings at the back of our System (CAS), Network Operations Centre (NOC) & Operations FTTH strength. Support System (OSS) and Enterprise Resource Planning (ERP) & Billing System.
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The Smart TV, or the Connected TV (CTV), is an important manifestation of the way technology has changed the world of Cable TV and Broadband. It has given a new expression to customer experience. The technological convergence of computers, TV sets and set-top boxes gives them the best of all three, through an effortless blend of Integrated Internet with Interactive Web 2.0.
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Expanding outreach, the SMARTER way
With our sharper focus on customer enrichment, we, at Hathway, have leapfrogged our way to the next level of technological advancement to make our customer interface smarter and more engaging.
Led by our deep understanding of the customers’ transforming needs and aspirations in the new era, we have leveraged technology even more powerfully to broaden our outreach to them. Aligning ourselves with agility to the changes sweeping our business in the post-NTO regime, as well as the transformations brought in by RIL, we have augmented our strategic, technological and execution strengths by the power of `n’ to reach a new scale of productivity and proficiency.
Armed with a refreshed new outlook, and equipped with the necessary capabilities and capacities, we have given the customers many more reasons to look forward to staying connected with Hathway. The relationship we have built with customers is designed to survive the test of time, as became evident in the COVID period, when we ensured that the users continued to revel in the Hathway experience seamlessly and uninterruptedly despite the problems brought in by the pandemic. Easy access of Mobile Apps and Enhancing the Cable TV experience Portals to customers and LCOs At the heart of our customer-focussed Cable TV strategy is our effort to continuously deepen our understanding Online renewal and payment facility of customer needs, and progressively scale up our technological and IT edge to address the same. through various self-care apps The assurance of the hassle-free viewing experience that we offer customers is the pivot of our business proposition, Customer Expiry Notification System and we initiated several measures during the year to scale through TV & SMS up this proposition. Enhanced customer order fulfilment – instant customer activation with online activation payment Automated multi-lingual Call Centre to provide enhanced customer service
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Enriching the Broadband experience The Hathway Broadband service has witnessed technological upgradations year-on-year, to drive a more enhanced customer experience through increased bandwidth, more tech-enabled frontline customer-facing processes, and quality enhancements to online content consumption capabilities. FY 2019-20 saw the Company further build on its customer service charter through a slew of initiatives, crafted to deliver a more engaging experience, and ensuring greater customer stickiness.
• Our high-speed Broadband service gives a seamlessly converged experience to users, who get the freedom to select and download more than 2000 Apps from Google Play, including play services, games and music
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The transformation sweeping the Television and Broadband experience for users has transcended the barriers of time and space. New customer aspirations are driving new changes in the evolving business landscape. It is a holistic evolution, propelled by strategy, innovation and digitalisation. A change that is powered as much by the urge to boost profitability as it is by the transforming desires of today’s customers.
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We, at Hathway, are also continually pushing the frontiers of our strengths to keep pace with the dynamic transformations taking place in our business eco-system. Realigning our strategic priorities, and strengthening our execution capabilities, we have energised our core to surge forward to meet the needs of the new-age customers. At the same time, we have enhanced our system efficiencies and optimised our business processes to achieve higher levels of excellence, as manifest in the consistent improvement of our performance across segments.
Hathway Cable and Datacom Limited Annual Report 2019-20 23 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS stronger efficiencies. sharper focus. smarter growth.
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With a sharply focussed strategic approach steering the growth in efficiencies, across the operational fabric of the organisation, Hathway witnessed smarter growth and returns on investment across its business segments during FY 2019-20.
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Consolidated Results
` 20,441 Mn ` 14,161 Mn Gross Revenue Subscription Revenue
` 6,811 Mn 33.3% EBIDTA EBIDTA Growth
Key Performance Indicators in Broadband
` 5,677 Mn 0.97 Mn Business Revenue No. of subscribers
1.04 Mbps 188 GB Average Bandwidth Average data usage per Consumption customer per month
Beyond numbers... The realisation of Hathway’s smart growth is apparent in the recognitions and awards it continues to receive year after year. The Company has been awarded the Best MSO by the Indian Telly Awards for its quality Cable TV and Broadband Internet Services nine times, and also the “Star News Brand Excellence Awards for Brand Excellence in Digital Products for Internet Services in 2011”. Hathway has been voted as one of the best managed media companies in Asia 2013, based on a study conducted by EUROMONEY.
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CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
More ahead...
The strong operational and fiscal performance posted in the Way Forward – Cable TV tough and challenging macro environment of FY 2019-20 The aspirational evolution of customers is steering an was a precursor to the greater growth that we see ahead. all-embracing change in content consumption as well as In the post NTO era, we see Hathway strengthening its the delivery patterns in the Cable TV industry. Launch of portfolio of offerings even more sharply, to further augment value-added services and geographical expansion will lead its efficiencies and deliver an even better performance. our growth strategy in this business segment, where we also see immense opportunity in HD by way of new channel Central to this optimism is our strong understanding of the launches and better regional content. evolving market and customer trends, coupled with our Way Forward – Broadband ability to integrate ourselves - strategically and operationally With the rapid growth of the top power cities, backed by - with the emerging patterns. The opportunity matrix ahead the Government of India’s focus on Smart cities, pushing is clearly defined, and we intend making the most of the demand for high speed connectivity in the fixed Broadband new possibilities and potential through our digitisation and segment, we shall continue to fortify our customer connect in automation thrust. In post NTO world, we find ourselves well this segment. We shall leverage our unique value proposition poised to take advantage of our unique and well-structured of innovative product and service offerings, supported by strategic and execution strengths to delight customers, continuous improvement of business processes and optimal outperform competition, and ensure good return on use of resources, in order to deepen penetration into new and investment for all stakeholders. existing markets, and to expand our FTTH customer base.
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Mapping the GTPL Hathway performance
Regional growth and expansion plays an important role in the stake in GTPL, which has 67% and 24% market share in accelerated transformational environment that has caught the Gujarat and West Bengal, respectively. The market share is imagination of the TV industry in recent years. With increased likely to be further enhanced over the next few years with the customer focus guiding the change, the opportunity layers NTO interventions and the Reliance strengths complementing in the regional Cable TV markets have expanded, offering the value proposition for GTPL, which has emerged as a greater potential for the progression of regional players. leading market player offering converged Television and Broadband services to customers across India. GTPL stands GTPL Hathway Limited, with its technology and digital edge out as No. 1 MSO in Gujarat, where it has its main headend along with localised and custom-led content, has emerged (in Ahmedabad), and No. 2 in India. a major beneficiary of this change. Hathway holds 37.32%
40,000 kms Optical Fibre Cable - Owned (3,000+ Kms. Underground; Quality fibre 5,500+ Kms. Leased) Cutting-edge cable network technologies 800+ Towns of presence
GTPL Edge 12 States Superior Timely customer high-end experience service 10.20 Mn Seeded STBs
8.00 Mn Innovative product Active Cable TV Subscribers portfolio 3.33 Mn Broadband Home-Pass Key Performance Indicators ` 4,695 Mn ` 24,247 Mn* 405,000 Market capitalisation as on Revenue for FY 2019-20 Active Broadband Subscribers March 31, 2020 ` 5,025 Mn* ` 770 Mn* 100,000 EBIDTA for FY 2019-20 PAT for FY 2019-20 FTTH Subscribers *Consolidated
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Notice
NOTICE is hereby given that the Sixtieth Annual General SPECIAL BUSINESS: Meeting of the Company will be held on Friday, September 4. t o reappoint Ms. Ameeta Parpia as an Independent 25, 2020 at 12 p.m. IST through Video Conferencing (“VC”)/ Director and in this regard, to consider and if thought Other Audio-Visual Means (“OAVM”) to transact the fit, to pass, with or without modification(s), the following business: following resolution as a Special Resolution: “R ESOLVED THAT pursuant to sections 149, 152 ORDINARY BUSINESS: and Schedule IV of the Companies Act, 2013 including 1. to consider and adopt (a) the audited standalone subsequent rules thereof and applicable provisions of financial statement of the Company for the financial SEBI (Listing Obligations and Disclosure Requirements) year ended March 31, 2020 and the reports of the Board Regulations, 2015 and as per the recommendation of of Directors and Auditors thereon; and (b) the audited Nomination and Remuneration Committee of the Board consolidated financial statement of the Company for of Directors of the Company, Ms. Ameeta Parpia, having the financial year ended March 31, 2020 and the report Director Identification Number 02654277, be and is hereby of Auditors thereon and in this regard, to consider and re-appointed as an Independent Director of the Company, if thought fit, to pass, with or without modification(s), for the second term of five consecutive years with effect the following resolutions as Ordinary Resolutions: from February 11, 2020 to hold office up to February 10, 2025. a) “R ESOLVED THAT the audited standalone financial RESOLVED FURTHER THAT the Board of Directors be statement of the Company for the financial year and is hereby authorised to do all acts and take all such ended March 31, 2020 and the reports of the Board steps as may be necessary, proper or expedient to give of Directors and Auditors thereon, as circulated effect to this resolution.” to the members, be and are hereby considered and adopted.” 5. t o ratify the remuneration of Cost Auditors for the financial year ending March 31, 2021 and in this b) “R ESOLVED THAT the audited consolidated financial regard, to consider and if thought fit, to pass, with or statement of the Company for the financial year ended without modification(s), the following resolution as an March 31, 2020 and the report of Auditors thereon, Ordinary Resolution: as circulated to the members, be and are hereby “R ESOLVED THAT in accordance with the provisions considered and adopted.” of Section 148 and other applicable provisions of the 2. to appoint Mr. Viren Raheja, who retires by rotation Companies Act, 2013 read with the Companies (Audit as Director and in this regard, to consider and if and Auditors) Rules, 2014 (including any statutory thought fit, to pass, with or without modification(s), the modification(s) or re-enactment(s) thereof, for the time following resolution as an Ordinary Resolution: being in force), the remuneration, as approved by the Board of Directors and set out in the Statement annexed to “R ESOLVED THAT in accordance with the provisions the Notice, to be paid to the Cost Auditors appointed by the of Section 152 and other applicable provisions of the Board of Directors, to conduct the audit of cost records of Companies Act, 2013, read with rules thereunder, the Company for the financial year ending March 31, 2021, Mr. Viren Raheja (DIN: 00037592), who retires by rotation at be and is hereby ratified.” this meeting, be and is hereby appointed as Non-Executive Director of the Company.” By Order of the Board of Directors Sd/- 3. to appoint Ms. Geeta Fulwadaya, who retires by Ajay Singh Head Corporate Legal, rotation as Director and in this regard, to consider and Company Secretary and if thought fit, to pass, with or without modification(s), Chief Compliance Officer the following resolution as an Ordinary Resolution: Mumbai, August 10, 2020 FCS 5189 “R ESOLVED THAT in accordance with the provisions Registered Office of Section 152 and other applicable provisions of the Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, Companies Act, 2013 read with rules thereunder, Ms. Geeta Santacruz West, Mumbai 400054 Fulwadaya (DIN: 03341926), who retires by rotation at this CIN: L64204MH1959PLC011421 meeting, be and is hereby appointed as Non-Executive Tel No. 022-26001306 Fax No. 022-26001307 Director of the Company.” Mail: [email protected] • Website: www.hathway.com
30 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NOTES: appointment of auditors by the members at every AGM 1. Considering the present Covid-19 pandemic, the Ministry has been done away with. Accordingly, the ratification of Corporate Affairs (“MCA”) has vide its circular dated of appointment of M/s. Nayan Parikh & Co., Chartered May 5, 2020 read together with circulars dated April 8, Accountants, who were appointed as the Statutory 2020 and April 13, 2020 (collectively referred to as “MCA Auditors at the Fifty Seventh AGM held on September 15, 2017, for a period of 5 years, is not required at the Circulars”) permitted convening the Annual General ensuing AGM. Meeting (“AGM”) through VC / OAVM, without the physical presence of the Members at a common venue. 7. Since the AGM will be held through VC/OAVM, the Route In compliance with the provisions of the Companies Act, Map of the venue of the AGM is not annexed hereto. 2013 (“Act”), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing DISPATCH OF ANNUAL REPORT THROUGH Regulations”) and MCA Circulars, the AGM of the ELECTRONIC MODE: Company is being held through VC/ OAVM. The deemed 8. In compliance with the MCA Circulars and SEBI venue for the AGM shall be the Registered Office of circular dated May 12, 2020, Notice of the AGM along the Company. with the Annual Report for the FY 2019-20 is being 2. A statement pursuant to Section 102(1) of the Act, relating sent only through electronic mode to those members to the Special Business to be transacted at the AGM is whose email addresses are registered with the Company/ Depository Participant(s). Members may annexed hereto. note that the Notice and Annual Report for 2019-20 3. A member entitled to attend and vote at the meeting is will also be available on the Company’s website at also entitled to appoint a proxy to attend and vote on a www.hathway.com, websites of the Stock Exchanges poll instead of himself/herself and such proxy need not i.e. BSE Limited and National Stock Exchange be a member of the Company. Since this AGM is being of India Limited at www.bseindia.com and www. held through VC/ OAVM pursuant to the MCA Circulars, nseindia.com respectively and on the website of physical attendance of members has been dispensed KFin Technologies Private Limited (“KFinTech”) at with. Accordingly, the facility for appointment of proxies by https://evoting.karvy.com. the members will not be available for the AGM and hence the Proxy Form and Attendance Slip are not annexed to 9. For receiving all communication (including Annual Report) from the Company electronically: this Notice.
4. In terms of the provisions of Section 152 of the Act, Mr. a. Members holding shares in physical mode and who Viren Raheja and Ms. Geeta Fulwadaya, Director, retires have not registered/ updated their email address by rotation at the Meeting. Nomination and Remuneration may get their e-mail addresses registered with Committee and the Board of Directors of the Company Link Intime India Private Limited, Registrar and recommend their appointment. Mr. Viren Raheja and Ms. Transfer Agent, by clicking the link: https://linkintime. Geeta Fulwadaya are interested in the ordinary resolution co.in/emailreg/email_register.html on the website set out at Item No.2 & 3 respectively with regard to their www.linkintime.co.in under the Investor Services appointment. The relatives of Mr. Viren Raheja and Ms. tab by choosing the Email / Bank Registration Geeta Fulwadaya may be deemed to be interested in heading and following the registration process the resolution set out at Item No. 2 & 3 respectively of as guided therein. The members are requested the Notice, to the extent of their shareholding interest, if to provide details such as Name, Folio Number, any, in the Company. Save and except the above, none Certificate number, PAN, mobile number and e-mail of the other Directors / Key Managerial Personnel of the id and also upload the image of share certificate in PDF or JPEG format. (upto 1 MB). In case of any Company / their relatives are, in any way, concerned or query, a member may send an e-mail to RTA at interested, financially or otherwise, in the resolution. [email protected]. 5. Details of Directors retiring by rotation/re-appointment at this AGM are provided in the “Annexure” to the notice. b. Members holding shares in dematerialized mode are requested to register/ update their email addresses 6. Pursuant to the amendment to the section 139 of the with the relevant Depository Participant with whom Act, effective from May 7, 2018, the ratification of the they maintain their account.
Hathway Cable and Datacom Limited Annual Report 2019-20 31 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
PROCEDURE FOR JOINING THE AGM THROUGH iii. After logging in, click on “Video Conference” VC/OAVM: option 10. The Company will provide VC/OAVM facility to its Members for participating at the AGM. iv. Then click on camera icon appearing against AGM event of Hathway Cable and Datacom a. Members will be able to attend the AGM Limited, to attend the Meeting. through VC/OAVM by using their e-voting login credentials. b. Members who do not have User ID and Password for e-voting or have forgotten the User ID and Members are requested to follow the procedure Password may retrieve the same by following the given below: procedure given in the E-voting instructions.
OPTION 1 11. Members who would like to express their views or ask questions during the AGM may register themselves by i. Launch internet browser (Edge 44+, Firefox logging on to https://emeetings.kfintech.com and clicking 78+, Chrome 83+, Safari 13+) by typing the on the ‘Speaker Registration’ option available on the URL: https://jiomeet.jio.com/hathwayagm screen after log in. The Speaker Registration will be open during Saturday, September 19, 2020 to Monday, ii. Select “Shareholders” option on the screen September 21, 2020. Only those members who are registered will be allowed to express their views or ask iii. Enter the login credentials questions. The Company reserves the right to restrict the number of questions and number of speakers, User ID: For demat shareholders: 16-digit depending upon availability of time as appropriate for DPID+Client ID is your User ID smooth conduct of the AGM.
(DP ID and Client ID to be typed continuously) 12. Members will be allowed to attend the AGM through VC/ OAVM on first come first serve basis. For e.g. IN12345612345678 (NSDL) 1402345612345678 (CDSL) 13. Facility to join the meeting shall be opened thirty minutes before the scheduled time of the AGM and shall be kept (Client ID is the last 8 digits of your demat open throughout the proceedings of the AGM. account number as per your account statement / contract note / delivery instruction slip / email 14. Members who need assistance before or during the sent by the Company); or AGM, can contact KFinTech on [email protected] or call on toll free number 1800-3454-001 (from 9:00 For holders of shares in physical form: a.m. to 5:00 p.m.). Kindly quote your name, DP ID-Client Your Folio No. is your User ID (to be typed ID/ Folio no. and E-voting Event Number in all your continuously) communications.
Password: Enter your password for e-voting 15. In case of joint holders attending the Meeting, only such sent by the Company through e-mail. joint holder who is higher in the order of names will be entitled to vote at the AGM. iv. After logging in, you will be directed to the AGM. 16. Members attending the AGM through VC/OAVM shall be reckoned for the purpose of quorum under Section 103 OPTION 2 of the Act. i. Launch internet browser (Edge 44+, Firefox 78+, Chrome 83+, Safari 13+) by typing the 17. Members of the Company under the category of URL: https://emeetings.kfintech.com. Institutional Investors are encouraged to attend and vote at the AGM. ii. Enter the login credentials (i.e., User ID and password for e-voting).
32 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
PROCEDURE FOR REMOTE E-VOTING AND will also be made available at the Meeting (“Insta Poll”) E-VOTING AT THE AGM: and members attending the Meeting who have not cast 18. Pursuant to the provisions of Section 108 and other their vote(s) by remote e-voting will be able to vote at the applicable provisions, if any, of the Companies Act, Meeting through Insta Poll. 2013 read with the Companies (Management and Administration) Rules, 2014, as amended, and Regulation The Company has engaged the services of KFinTech as 44 of SEBI Listing Regulations, the Company is providing the agency to provide e-voting facility. to its members facility to exercise their right to vote on resolutions proposed to be passed at AGM by electronic The manner of voting remotely by members holding means (“e-voting”). Members may cast their votes shares in dematerialized mode, physical mode and for remotely, using an electronic voting system on the dates members who have not registered their email addresses mentioned herein below (“remote e-voting’’). Further, is provided in the instructions given below. the facility for voting through electronic voting system
The remote e-voting facility will be available during the following voting period:
Commencement of remote e-voting 9:00 a.m. on Tuesday, September 22, 2020 End of remote e-voting 5:00 p.m. on Thursday, September 24, 2020
The remote e-voting will not be allowed beyond the iii. A person, whose name is recorded in the register aforesaid date and time and the remote e-voting module of members or in the register of beneficial owners shall be forthwith disabled by KFinTech upon expiry of the maintained by the Depositories as on the cut-off aforesaid period. date i.e. Friday, September 18, 2020 only shall be entitled to avail the facility of remote e-voting or for Voting rights of a member/beneficial owner (in case participation at the AGM and voting through Insta of electronic shareholding) shall be in proportion Poll. A person who is not a member as on the cut- to his/her share in the paid-up equity share capital off date, should treat the Notice for information of the Company as on the cut-off date i.e. Friday, purpose only. September 18, 2020. iv. Any person who becomes a member of the Company The Board of Directors of the Company has appointed after dispatch of the Notice of the Meeting and Mr. Himanshu Kamdar, Practicing Company Secretary holding shares as on the cut-off date may obtain the (Membership No. 5171), as Scrutinizer to scrutinize User ID and password from KFinTech in the manner the remote e-voting and Insta Poll process in a fair as mentioned below: and transparent manner and he has communicated his willingness to be appointed and will be available for the a. If the mobile number of the member is registered said purpose. against Folio No. / DP ID Client ID, the member may send SMS: MYEPWD
ii. A member has to opt only single mode of voting i.e. b. If e-mail address or mobile number of the through remote e-voting or Insta Poll. If a member member is registered against Folio No. / DP casts vote(s) through remote e-voting then he/she ID Client ID, then on the home page of https:// shall not be allowed to vote again at the Meeting. evoting.karvy.com, the member may click
Hathway Cable and Datacom Limited Annual Report 2019-20 33 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
“Forgot Password” and enter Folio No. or DP logging in for the first time. The new ID Client ID and PAN to generate a password. password shall comprise minimum 8 characters with at least one upper case c. Member may call on KFinTech’s toll-free (A-Z), one lower case (a-z), one numeric number 1800-3454-001 (from 9:00 a.m. to (0-9) and a special character (@,#,$,etc.). 5:00 p.m.) The system will prompt you to change your password and update your contact details d. Member may send an e-mail request to like mobile number, e-mail address, etc. [email protected]. on first login. You may also enter a secret question and answer of your choice to e. If the member is already registered with retrieve your password in case you forget KFinTech’s e-voting platform, then he can use it. It is strongly recommended that his existing password for logging in. you do not share your password with any other person and that you take v. The Company has opted to provide the same utmost care to keep your password electronic voting system at the Meeting, as used confidential. during remote e-voting, and the said facility shall be operational till all the resolutions proposed in e. You need to login again with the new the Notice are considered and voted upon at the credentials. Meeting and may be used for voting only by the members holding shares as on the cut-off date who f. On successful login, the system will are attending the Meeting and who have not already prompt you to select the E-Voting Event cast their vote(s) through remote e-voting. Number (EVEN) for Hathway Cable and Datacom Limited. vi. information and instructions for remote e-voting: g. On the voting page, enter the number of iA. i n case member receives an e-mail from the shares as on the cut-off date under either Company/ KFinTech [for members whose “FOR” or “AGAINST” or alternatively, you e-mail addresses are registered with the may partially enter any number under Company/ Link Intime India Private Limited/ “FOR” / “AGAINST”, but the total number Depository Participant(s)]: under “FOR” / “AGAINST” taken together a. Launch internet browser by typing the should not exceed your total shareholding URL: https://evoting.karvy.com as on the cut-off” date. You may also choose to “ABSTAIN” and vote will not be b. Enter the login credentials (User ID and counted under either head. password given in the e-mail). The E-Voting Event Number+Folio No. or DP h. Members holding shares under multiple ID Client ID will be your User ID. However, folios/demat accounts shall choose the if you are already registered with KFinTech voting process separately for each of the for e-voting, you can use the existing folios / demat accounts. password for logging in. If required, please visit https://evoting.karvy.com or contact i. Voting has to be done for each item of toll-free number 1800-3454-001 (from the Notice separately. In case you do not 9:00 a.m. to 5:00 p.m.) for your existing desire to cast your vote on any specific password. item, it will be treated as “ABSTAINED”.
c. After entering these details appropriately, j. You may then cast your vote by selecting click on “LOGIN”. an appropriate option and click on “SUBMIT”. d. You will now reach Password Change Menu wherein you are required to k. A confirmation box will be displayed. Click mandatorily change your password upon “OK” to confirm, else “CANCEL” to modify.
34 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
l. Once you confirm, you will not be allowed pdf/Annual%20Report/Nomination%20 to modify your vote. Form.pdf.
m. Corporate/Institutional Members (i.e., c. Members holding shares in other than Individuals, HUFs, NRIs, dematerialized mode who have not etc.) are also required to send legible registered their e-mail addresses scanned certified true copy (in PDF with their Depository Participant(s) Format) of the Board Resolution/Power are requested to register/update their of Attorney/Authority Letter, etc., together email addresses with the Depository with attested specimen signature(s) of Participant(s) with whom they maintain the duly authorized representative(s), their demat accounts. to the Scrutinizer at e-mail id: hsk@ rathiandassociates.com with a copy d. After due verification, the Company/ marked to [email protected]. It is KFinTech will forward your login credentials also requested to upload the same in the to your registered email address. e-voting module in their login. The naming format of the aforesaid legible scanned e. Follow the instructions at I(A) (a) to (m) to document shall be “Corporate Name cast your vote. EVENT NO.” II. You can also update your mobile number iB. i n case of a member whose e-mail address is and e-mail ID in the user profile details of the not registered / updated with the Company/ folio which may be used for sending further Link Intime India Private Limited/Depository communication(s). Participant(s), please follow the following steps to generate your login credentials: iii. once the vote on a resolution is cast by a member, whether partially or otherwise, the a. The Members of the Company holding member shall not be allowed to change it Equity Shares of the Company in physical subsequently or cast the vote again. Form and who have not registered their e-mail addresses may get their e-mail IV. In case of any query pertaining to e-voting, addresses registered with Link Intime members may refer to the “Help” and “FAQs” India Private Limited, by clicking the link: sections/ E-voting user manual available https://linkintime.co.in/emailreg/email_ through a dropdown menu in the “Downloads” register.html on the website www.linkintime. section of KFinTech’s website for e-voting: co.in under the Investor Services tab by https://evoting.karvy.com or contact KFinTech choosing the E mail / Bank Registration as per the details given under sub-point heading and following the registration no. V below. process as guided therein. The members are requested to provide details such as V. Members are requested to note the following Name, Folio Number, Certificate number, contact details for addressing e-voting PAN, mobile number and e mail id and grievances: also upload the image of share certificate in PDF or JPEG format. (upto 1 MB). In Mr. S.V Raju, Deputy General Manager case of any query, a member may send KFin Technologies Private Limited an e-mail to RTA at rnt.helpdesk@ Selenium Tower B, Plot 31-32, Gachibowli, linkintime.co.in. Financial District, Nanakramguda, Hyderabad 500 032, India b. Advised to register nomination in respect Phone No.: +91 40 6716 1582 of their shareholding in the Company. Toll-free No.: 1800-3454-001 Nomination Form (SH-13) is put on the (from 9:00 a.m. to 5:00 p.m.) Company’s website and can be accessed E-mail: [email protected] at link https://www.hathway.com/assets/
Hathway Cable and Datacom Limited Annual Report 2019-20 35 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
VI. information and instructions for Insta Poll: the members from the date of circulation of this Notice up to the date of AGM. Members seeking to inspect such Facility to cast vote through Insta Poll will be documents can send an email to [email protected] made available on the Video Conferencing screen and will be activated once the Insta 20. Members seeking any information with regard to the Poll is announced at the Meeting. accounts or any matter to be placed at the AGM, are requested to write to the Company on or before Monday, VII. The Scrutinizer will, after the conclusion of September 21, 2020 through email on [email protected]. e-voting at the Meeting, scrutinize the votes The same will be replied by the Company suitably. cast at the Meeting (Insta Poll) and votes cast through remote e-voting, make a consolidated 21. The Annual Accounts of the subsidiary companies Scrutinizer’s Report and submit the same shall be available at the website of the Company to the Chairman. The result of e-voting will www.hathway.com. be declared within forty-eight hours of the conclusion of the Meeting and the same, along OTHER INFORMATION with the consolidated Scrutinizer’s Report, will 22. Securities and Exchange Board of India (“SEBI”) has be placed on the website of the Company: www. mandated that securities of listed companies can be hathway.com and on the website of KFinTech transferred only in dematerialized form w.e.f. April 1, 2019. at: https://evoting.karvy.com. The result will Accordingly, the Company or Company’s Share Transfer simultaneously be communicated to the Stock Agents, Link Intime India Private Limited has stopped Exchanges. accepting any fresh lodgment of transfer of shares in physical form. Members holding shares in physical form VIII. Subject to receipt of requisite number of are advised to avail of the facility of dematerialization. votes, the Resolutions proposed in the Notice shall be deemed to be passed on the date of the Meeting, i.e. Friday, By Order of the Board of Directors September 25, 2020. Sd/- Ajay Singh PROCEDURE FOR INSPECTION OF DOCUMENTS: Head Corporate Legal, Company Secretary and 19. The Register of Directors and Key Managerial Personnel Chief Compliance Officer and their shareholding maintained under Section 170 Mumbai, August 10, 2020 FCS 5189 of the Act, the Register of Contracts or Arrangements in which the directors are interested, maintained under Registered Office Section 189 of the Act and the relevant documents Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, referred to in the Notice will be available electronically for Santacruz West, Mumbai 400054 inspection by the members during the AGM. CIN: L64204MH1959PLC011421 Tel No. 022-26001306 Fax No. 022-26001307 All documents referred to in the Notice will also be Mail: [email protected] available electronically for inspection without any fee by Website: www.hathway.com
36 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
STATEMENT PURSUANT TO SECTION 102 (1) OF Save and except the above, none of the other Directors / Key THE ACT Managerial Personnel of the Company / their relatives are, in The following Statement sets out all material facts relating any way, concerned or interested, financially or otherwise, in to Special Business mentioned in the notice: the resolution.
Item No. 4 This statement may also be regarded as an appropriate disclosure under the Act and the SEBI Listing Regulations. As per Section 149(10) of the Act, an Independent Director shall hold office for a term of upto 5 (five) consecutive The Board recommends the Special Resolution set out at Item years on the Board of a Company subject to approval of No. 4 of the Notice for approval by the members. the members of the Company. The first term of Ms. Ameeta Parpia as Independent Director on the Board of Directors of Item No. 5 th the Company ended on 10 February, 2020. Accordingly, on The Board of Directors has, on the recommendation of the 16th January, 2020, based on the performance evaluation Audit Committee, approved the appointment and remuneration and recommendation of the Nomination and Remuneration of M/s. Ashok Agarwal & Co. (Firm Registration No. 000510), Committee, the Board of Directors of the Company had as Cost Auditors to conduct the audit of the cost records of the approved her re-appointment as an Independent Director and Company, for the financial year ending March 31, 2021 and now it is proposed to confirm her appointment as Independent also approved the remuneration of ` 575,000/- (Rupees Five Director in terms of the provisions of Sections 149, 152 read Lakh Seventy-Five Thousand only) to be paid to him. with Schedule IV and all other applicable provisions of the Act, SEBI Listing Regulations and the Articles of Association of In accordance with the provisions of Section 148 of the Act the Company. read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended The Board of Directors recommend the proposal to re-appoint by the Audit Committee and approved by the Board, has to be her as Independent Director for the second term of five ratified by the members of the Company. consecutive years with effect from February 11, 2020 to hold office up to February 10, 2025. The Company has received Accordingly, ratification by the members is sought for the written notice under Section 160 of the Act from members of remuneration payable to the Cost Auditors for the financial year the Company proposing the candidature of Ms. Ameeta Parpia, ending March 31, 2021 by passing an Ordinary Resolution as as Independent Director of the Company. set out at Item No. 5 of the Notice. The Company has also received a declaration of independence None of the Directors / Key Managerial Personnel of the from her. In the opinion of the Board, she fulfils the conditions Company / their relatives are, in any way, concerned or specified under the Act, the Companies (Appointment and interested, financially or otherwise, in the resolution. Qualification of Directors) Rules, 2014 and Regulation 16(1) (b) of SEBI Listing Regulations for her appointment as an The Board commends the Ordinary Resolution set out at Item Independent Director of the Company and is independent of No. 5 of the Notice for ratification by the members. the management. The Board considers that continuance of the association of Ms. Ameeta Parpia would be of immense By Order of the Board of Directors benefit to the Company considering her expertise and Sd/- experience and it is desirable to have her presence on Ajay Singh the Board. Head Corporate Legal, Ms. Ameeta Parpia is a renowned Advocate and Solicitor. She Company Secretary and is partner in Messrs. A.H. Parpia and Company, Advocates and Chief Compliance Officer Solicitors and has key expertise in the field of Conveyancing, Mumbai, August 10, 2020 FCS 5189 Personal laws, immovable property and documentation. Registered Office Ms. Ameeta Parpia is interested in the resolution set out at Item Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, No. 4 of the Notice with regard to her appointment. Relatives Santacruz West, Mumbai 400054 of Ms. Ameeta Parpia may be deemed to be interested in the CIN: L64204MH1959PLC011421 resolution to the extent of their shareholding interest, if any, in Tel No. 022-26001306 Fax No. 022-26001307 the Company. Mail: [email protected] • Website: www.hathway.com
Hathway Cable and Datacom Limited Annual Report 2019-20 37 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
ANNEXURE TO THE NOTICE DATED AUGUST 10, 2020 Details of Directors retiring by rotation and seeking appointment/ reappointment at the meeting:
Mr. Viren Raheja Date of Birth 13/06/1984 Nationality Indian Date of Appointment on the Board 28/03/2008 Qualification B. Com, MBA from London Business School, CFA Expertise in Specific Functional Area Holds Directorship in diversified industries including Real Estate, Cable TV, Retailing and Software Development Number of shares held in the Company 11,95,53,000 equity shares of ` 2 each Disclosure of relationships between directors inter-se Brother of Mr. Akshay Raheja, the Non-Executive Director of the Company Names of listed entities in which the director holds the directorship • Listed entities in which the director holds the and the membership of the Committees of the Board directorship a) Hathway Cable and Datacom Limited b) Sonata Software Limited
• Listed entities in which the director holds the membership of the Committees of the Board a) Hathway Cable and Datacom Limited • Audit Committee-Member • Nomination and Remuneration Committee- Member • Stakeholders’ Relationship Committee- Member • Investment and Loan Committee-Member • Administrative Cum Regulatory Committee- Member • Business Responsibility Committee-Member
b) Sonata Software Limited • Nomination and Remuneration Committee- Member
38 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Ms. Geeta Fulwadaya Date of Birth 17/11/1979 Nationality Indian Date of Appointment on the Board 30/01/2019 Qualification B.Com, Associate member of the Institute of Company Secretaries of India (ICSI) and law graduate from Government Law College Expertise in Specific Functional Area Extensive experience in the field of Corporate laws and allied matters Number of shares held in the Company NIL Disclosure of relationships between directors inter-se NIL Names of listed entities in which the director holds the directorship • Listed entities in which the director holds the and the membership of the Committees of the Board directorship a) Hathway Cable and Datacom Limited b) Den Networks Limited
• Listed entities in which the director holds the membership of the Committees of the Board a) Hathway Cable and Datacom Limited • Investment and Loan Committee-Member
b) Den Networks Limited • Finance Committee-Member
Ms. Ameeta Parpia Director Identification Number 02654277 Age 55 Date of first Appointment on the Board 11th February, 2015 Expertise in specific functional area In the field of Conveyancing, Personal laws, immovable property and documentation Directorships held in other Companies 1. Supreme Petrochem Limited 2. Prism Johnson Limited 3. Raheja QBE General Insurance Company Limited 4. Hathway Digital Limited Memberships/Chairmanships of Committees of other Companies Ms. Ameeta Parpia holds 2 Memberships and 3 Chairmanship in the Committees of Prism Johnson Limited 1. Stakeholders’ Relationship Committee 2. Nomination and Remuneration Committee 3. Audit Committee 4. Corporate Social Responsibility Committee 5. Risk Management Committee
Hathway Cable and Datacom Limited Annual Report 2019-20 39 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Ms. Ameeta Parpia holds 5 Memberships in the Committees of Supreme Petrochem Limited 1. Audit Committee 2. Stakeholders’ Relationship Committee 3. Finance Committee 4. Nomination and Remuneration Committee 5. Corporate Social Responsibility Committee
Ms. Ameeta Parpia holds 1 Membership and 2 Chairmanship in the Committees of Raheja QBE General Insurance Company Limited 1. Audit Committee 2. Corporate Social Responsibility Committee 3. Nomination and Remuneration Committee
Ms. Ameeta Parpia holds 1 Membership and 1 Chairmanship in the Committees of Hathway Digital Limited 1. Audit Committee 2. Nomination and Remuneration Committee Shareholding in the Company as on August 10, 2020 Ms. Ameeta Parpia holds 27,315 equity shares of the Company Number of Board meetings attended during the year i.e. 2019-20 Ms. Ameeta Parpia has attended 6 Board Meetings during the financial year 2019-20 Disclosure of relationships with directors and other key managerial Ms. Ameeta Parpia is not related, directly or indirectly, to any personnel Directors or other Key Managerial Personnel of the Company
By Order of the Board of Directors Sd/- Ajay Singh Head Corporate Legal, Company Secretary and Chief Compliance Officer Mumbai, August 10, 2020 FCS 5189
Registered Office Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, Santacruz West, Mumbai 400054 CIN: L64204MH1959PLC011421 Tel No. 022-26001306 Fax No. 022-26001307 Mail: [email protected] • Website: www.hathway.com
40 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Directors’ Report
Dear Members,
The Board of Directors are pleased to present the Company’s 60th Annual Report and the Company’s audited financial statement for the financial year ended 31st March, 2020.
1. Financial Results The Company’s financial performance for the year ended 31st March, 2020 is summarized below: - (` in Crores) Standalone Consolidated Particulars 2019-20 2018-19 2019-20 2018-19 Revenue from Operations 567.69 527.63 1798.39 1558.29 Other Income 250.34 54.86 245.75 60.91 Profit/(Loss) before Tax 107.69 (57.07) 109.57 (626.56) Less: Current Tax - - 0.12 0.06 Deferred Tax 91.05 (267.67) 3.98 (438.95) Profit/(Loss) for the year 16.64 210.60 105.47 (187.67) Add: Other Comprehensive Income (OCI) 0.04 0.85 (0.02) 1.14 Total Comprehensive Income for the year 16.68 211.45 105.45 (186.53) Add: Opening Balance in Retained Earnings and OCI (Adjusted) (777.76) (989.21) (1441.31) (1254.70) Less: Appropriation - General Reserve - - - - Closing Balance of Retained Earnings and OCI (761.09) (777.76) (1335.86) (1441.24)
2. transfer to Reserve Arrangement between the Company, Den Networks The Board of Directors of the Company have not Limited (DEN), TV18 Broadcast Limited (TV18), transferred any amount to the Reserves for the year Network18 Media & Investments Limited (Network18), under review. Media18 Distribution Services Limited (Media18), Web18 Digital Services Limited (Web18) and Digital18 Media 3. result of Operations & State of Limited (Digital18) and their respective shareholders and Company’s affairs creditors with appointed date 1st February, 2020, under During the year under review, the total revenue from the applicable provisions of the Companies Act, 2013 operations was ` 567.69 crores on standalone basis and (“the Act”). ` 1798.39 crores on consolidated basis as compared to the last year’s revenue of ` 527.63 crores on standalone The Scheme inter - alia provides for amalgamation of the basis and ` 1558.29 crores on consolidated basis Company, Den and TV18 into Network18 and transfer of respectively. The post-tax profit of your Company was the cable, broadband and digital businesses by Network18 ` 16.64 crores on standalone basis and ` 105.47 crores to it’s 3 (three) separate wholly owned subsidiaries, on consolidated basis as compared to the last year’s namely Media18, Web18 and Digital18, respectively. post-tax profit of ` 210.60 crores on standalone basis and post-tax Loss of ` 187.67 crores on consolidated The said Scheme is inter alia subject to approval from basis respectively. shareholders and creditors of the companies which are party to the Scheme, approval of the BSE Limited, the 4. Scheme of Amalgamation and National Stock Exchange of India Limited, the Securities Corporate Restructuring and Exchange Board of India, the Central Government, the During the year under review, the Board of Directors of the Hon’ble National Company Law Tribunal, the Department Company on recommendation of the Audit Committee, of Telecommunication and any other appropriate authorities approved composite scheme of Amalgamation and as may be required.
Hathway Cable and Datacom Limited Annual Report 2019-20 41 CORPORATE OVERVIEW NOTICE Directors’ Report MANAGEMENT DISCUSSION and ANALYSIS
5. Details of Material changes from From consumer behaviour point of view, the year the end of the financial year till the experienced gradual shift in consumers OTT viewing date of this report to large screen, thereby further strengthening our S ubsequent to the outbreak of Coronavirus (COVID-19) business case for FTTH. The growth in OTT segment and consequential nation wide lock down declared across growth is allowing us to leverage our high-speed the country on 20th March, 2020 by the Government of broadband offerings. India, which further got extended till 3rd May, 2020, the Company has continued to operate and provide internet The average bandwidth consumption (MBPS) per services to its customers, which has been declared as subscriber is 1.04. The average data usage per customer per month has now reached 188 GB which an essential service, without any significant disruptions. shows customers preference of watching online However, disruptions to businesses worldwide and media and reflects the binge-watching culture of economic slowdown may have its eventual impact on users. The average speed offered to our customers the Company. A definitive assessment of the impact is is 94 MBPS. not possible at this point of time, in view of the highly uncertain economic environment and the scenario is still Your Company has always invested and focused evolving.The Company has evaluated its liquidity position to bring path breaking innovative technological and of recoverability and carrying values of its assets and products and offerings to its customers. Living by have concluded that no material adjustments is required this philosophy, the Company continued to focus on at this stage in its financial statements. Hathway Play Box based on android platform which provides world class large screen OTT viewing 6. Dividend experience to our privileged customers. Hathway The Board of Directors of the Company have not Play box also allows consumers to experience recommended any dividend on Equity Shares for the year Android gaming on big screen including multiple under review. users having gaming fun on same screen. It also provides consumers a smarter way to watch all 7. Management Discussion and Analysis Google Play content on a big screen. These initiatives Management’s Discussion and Analysis Report for help to increase customer sticky-ness and to retain the year under review, as stipulated under Securities customers for longer duration. and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI India has around 19.14 Mn wireline broadband (LODR)” is presented in a separate section, which forms subscribers as on 31st December, 2019 (As per part of the Annual Report. revised definition i.e. a Broadband customer is a customer having minimum speed of 512 KBPS). 8. Bus iness Operations/Performance Comparing the trend on 9-month basis, the of the Company and its major wireline broadband number has added by 0.72 Mn Subsidiaries subscribers (March 2019 18.42 Mn) [Source-TRAI The developments in business operations / performance Report February 2020]. Customers increasingly of the Company and its major subsidiaries consolidated prefer wireline broadband as it allows online media with the Company are as below: consumption and seamless accessibility of data to multiple devices while at home. a. Broadband Business With deployment of GPON FTTH and Parallel The Company’s technologic edge, customer network in High Potential High Penetrated DOCSIS centricity, unique value preposition of product home passes, the Company assessed an opportunity and service offerings, continuous improvement of to increase market share by offering 200-500 MBPS business process, optimization usage of resources speed to its premium consumers, which resulted and its lean towards digitisation and automation in increase of minimum data limits across country helped Company garner strong FTTH customers to 200 GB/consumer/month. Besides during this acquisition growth during the year. year, the Company focused largely to re-engineer its customer front-ending processes to make them B. cable Television Business: technology enabled, so as to drive operational This has been a transformational year for Cable efficiencies and enhanced consumer experience. Television Business, post implementation of
42 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
New Tariff Order (NTO) from 1st February, 2019. 10. consolidated Financial Statement The purpose of the new tariff order was to bring In accordance with the provisions of the Act and SEBI transparency to end customers and provide them (LODR) read with Ind AS-110 (Consolidated Financial freedom to watch television of their choice and also Statement), Ind AS-28 (Investments in Associates and to bring fairness in share allocation of subscription Joint Ventures), the consolidated audited financial revenues within the stakeholders. statement forms part of the Annual Report.
To meet the end objective of effective implementation 11. Subsidiaries, Joint Ventures and of New Tariff order and establishing a sustainable Associate Companies renewed business model, the Company undertook During the year under review and till the date of this report, series of transformational initiatives. These initiatives no company has become or ceased to be subsidiary, joint largely thrive on our technological supremacy over venture or associate of the Company. competition to provide best-in-class experience to our customers and many of these are industry A statement providing details of performance and salient first initiatives. Some of key initiatives are features of the financial statements of Subsidiary/ enumerated below: Associate/ Joint Venture companies, as per Section 129(3) of the Act, is provided as Annexure I to this report. • Enhanced our system and technical capabilities to meet customer wants to watch television of The audited financial statement including the consolidated their choice; financial statement of the Company and all other documents required to be attached thereto is put up on • Enables access of Mobile Apps and Portals to the Company’s website and can be accessed at https:// our customers and LCOs; www.hathway.com/About/QuarterlyFinancialResults#. The financial statements of the subsidiaries, as required, • Encouraging LCO’s to empower their customers are put up on the Company’s website and can be accessed with online renewal facility; at https://www.hathway.com/About/Subsidiaries
• Advanced technical capability to provide timely The Company has formulated a policy for determining renewal notifications to customers coupled with Material Subsidiaries and the same is placed on the SMS alerts; website of the Company at https://www.hathway.com/ assets/pdf/Policies/Policy%20on%20material%20 • Enhanced Customer order fulfillment - Instant subsidiaries_2014-15_11.02.2015.pdf Customer Activation; 12. secretarial Standards • Unique bouquet of customer offerings – Android The Directors state that applicable Secretarial Standards Hybrid Cable & OTT STB; i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have • Automated multi-lingual Call Center providing been duly followed by the Company. enhanced customer service experience; 13. Directors’ Responsibility Statement Your Company has successfully implemented DPO The Board of Directors state that: packs for all regions. Packaging is based on the extensive consumer research and focused group a) in the preparation of the annual accounts for the year interviews with the customers along with input from ended 31st March, 2020, the applicable accounting Local Cable Operators. In view of the NTO, the standards read with requirements set out under relationship between the stakeholders has improved, Schedule III to the Act have been followed and there which helped us to drive our initiatives. were no material departures from the same;
9. credit Rating b) the Directors have selected such accounting policies The Company’s financial discipline and prudence is and applied them consistently and made judgements reflected in the strong credit ratings ascribed by rating and estimates that are reasonable and prudent so as agencies. The details of credit ratings are disclosed in the to give a true and fair view of the state of affairs of the Corporate Governance Report, which forms part of the Company as at 31st March, 2020 and of the profit of Annual Report. the Company for the year ended on that date;
Hathway Cable and Datacom Limited Annual Report 2019-20 43 CORPORATE OVERVIEW NOTICE Directors’ Report MANAGEMENT DISCUSSION and ANALYSIS
c) the Directors have taken proper and sufficient 16. corporate Social Responsibility care for the maintenance of adequate accounting The Corporate Social Responsibility Committee has records in accordance with the provisions of the formulated and recommended to the Board, a Corporate Act for safeguarding the assets of the Company Social Responsibility Policy (CSR Policy) indicating the and for preventing and detecting fraud and other activities to be undertaken by the Company, which has irregularities; been approved by the Board.
d) the Directors have prepared the annual accounts on In terms of the CSR Policy, the focus areas of engagement a ‘going concern’ basis; shall be rural transformation, affordable healthcare solutions, access to quality education, environmental e) the Directors have laid down internal financial sustainability and protection of national heritage. controls to be followed by the Company and that such internal financial controls are adequate and are The Company’s average net profit for the three immediately operating effectively; and preceding financial years was negative. Hence, in terms of the Act, during the year under review, the Company f) the Directors have devised proper systems to ensure was not required to spend any amount on CSR activities. compliance with the provisions of all applicable The CSR Policy may be accessed on the Company’s laws and that such systems are adequate and website at https://www.hathway.com/assets/pdf/Policies/ operating effectively. CSR%20Policy.pdf 14. corporate Governance 17. risk Management The Company is committed to maintain the highest The Company has in place Risk Management Committee standards of Corporate Governance and adhere to which has established a robust Risk Management Policy the Corporate Governance requirements set out by the and an adequate risk management infrastructure in place, Securities and Exchange Board of India, (“SEBI”). capable of addressing all the risks that the organization The detailed Corporate Governance Report of the faces such as financial, credit, market, liquidity, security, Company in pursuance of the SEBI (LODR) forms part IT (cyber risk), legal, regulatory, reputational risks and such other risks. of the Annual Report of the Company. The requisite Certificate from a Practicing Company Secretary The Risk Management Committee manages, monitors confirming compliance with the conditions of Corporate and reports on the principal risks and uncertainties that Governance as stipulated under the SEBI (LODR) is can impact its ability to achieve its strategic objectives. enclosed to the Corporate Governance Report. The Company’s management systems, organisational structures, processes, standards, code of conduct and 15. Contracts and arrangements with behaviors governs how the Company conducts the Related Parties business and manages associated risks. During the year under review, all the transactions which were within the purview of Section 188 of the Act, were 18. internal Financial Controls on an arm’s length basis and entered into in the ordinary The Company has adequate internal financial controls course of business of the Company. commensurate with the size of the business and nature of Members may refer Note 4.13 to the Standalone Financial its operations, designed to provide reasonable assurance Statement which sets out related party disclosures with regard to the accuracy and completeness of the accounting records and timely preparation and provision pursuant to Ind AS/applicable accounting standards. of reliable financial statements. The Policy on Materiality of Related Party Transactions on dealing with Related Party Transactions as approved 19. Directors and Key Managerial by the Board is put up on the Company’s website and Personnel can be accessed at https://www.hathway.com/assets/ In accordance with the provisions of the Act and the pdf/Policies/Related%20Party%20Transactions%20 Articles of Association of the Company, Mr. Viren Raheja Policy_16.01.2020.pdf (DIN: 00037592) and Ms. Geeta Fulwadaya (DIN: 03341926), Directors of the Company, retire by rotation There were no materially significant related party at the ensuing Annual General Meeting and being eligible transactions which could have potential conflict with have offered themselves for re-appointment. The Board of interest of the Company at large. Directors have recommended their re-appointment.
44 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
During the year, the Board of Directors of the Company Board places on record its appreciation for the valuable have appointed: contribution made by him during his tenure as an Independent Director of the Company. 1. Mr. A. Siddharth (DIN: 00016278) as an Additional Director, designated as an Independent Director Save and except aforementioned, there were no other of the Company for a period of five years fromth 5 changes in the Board of Directors and Key Managerial August, 2019 to 4th August, 2024. Mr. A. Siddharth, Personnel of the Company. however resigned from the Board on 3rd September, 2019. The Company has received separate declarations from all Independent Directors of the Company, respectively 2. Mr. Sridhar Gorthi (DIN: 00035824) as an Additional confirming that: Director, designated as an Independent Director i) they meet with the criteria of independence as of the Company for a period of five years fromth 5 prescribed under Section 149(6) of the Act. August, 2019 to 4th August, 2024.
ii) they have registered their names in the Independent 3. Mr. Sasha Mirchandani (DIN: 01179921) as an Additional Director, designated as an Independent Directors’ Databank. Director of the Company for a period of five years The Company has devised the Nomination and from 5th August, 2019 to 4th August, 2024. Remuneration Policy, which is put up on the Company’s Mr. Sridhar Gorthi and Mr. Sasha Mirchandani completed website at https://www.hathway.com/About/Policies. their respective first tenure as Independent Director on 4th August, 2019. Appointment of Mr. Sridhar Gorthi The Policy sets out the guiding principles for the NRC for and Mr. Sasha Mirchandani as Independent Directors identifying persons who are qualified to become Director of the Company was subsequently approved by the and to determine the independence of Directors, in case Shareholders of the Company through Postal Ballot on 4th of their appointment as Independent Directors of the January, 2020. Company. The Policy also provides for the factors in evaluating the suitability of individual Board members with In the opinion of the Board, the Company has immensely diverse background and experience that are relevant for benefited from the rich experience of Mr. Sridhar Gorthi the Company’s operations. as a Corporate Lawyer and Mr. Sasha Mirchandani as financial and investment expert, during their previous The Policy also sets out the guiding principles for the tenure and looks forward to their continued support and NRC for recommending to the Board the remuneration guidance in taking the Company forward. of the Directors, Key Managerial Personnel and other employees. Ms. Ameeta Parpia’s first tenure as Independent Director of the Company got completed on 10th February, 2020. There has been no major change in the aforesaid policy The Board of Directors of the Company, based on the during the year. recommendation of the Nomination and Remuneration Committee (NRC), at its meeting held on 16th January, 20. performance Evaluation 2020, approved her re-appointment for a second term as The Company has a policy for performance evaluation Independent Director of the Company for a period of five of the Board, Committees and other Individual Directors consecutive years with effect from 11th February, 2020 to (including Independent Directors) which include criteria hold office up to 10th February, 2025. It is proposed to for performance evaluation of Non-executive Directors approve her re-appointment as Independent Director by and Executive Directors. the Shareholders at the ensuing Annual General Meeting of the Company. In accordance with the manner specified by the Nomination and Remuneration Committee, the Committee carried The Board considers that given her background, out annual performance evaluation of the Board, its experience and contribution made by her during her first Committees and Individual Directors. The Independent tenure, the continued association of Ms. Ameeta Parpia Directors carried out annual performance evaluation of will be beneficial to the Company. the Chairperson, the Non-Independent Directors and the Board as a whole. The Chairman of the respective The tenure of Mr. Devendra Shrotri (DIN 02780296), Committees shared the report on evaluation with the Independent Director, expired on 4th August, 2019. The respective Committee members. The performance of each
Hathway Cable and Datacom Limited Annual Report 2019-20 45 CORPORATE OVERVIEW NOTICE Directors’ Report MANAGEMENT DISCUSSION and ANALYSIS
Committee was evaluated by the Board, based on report B. audit Committee on evaluation received from respective Committees. A The Audit Committee of the Company comprises Consolidated Report was shared with the Chairman of the of Mr. Shridhar Gorthi (Chairman), Mr. Sasha Board for his review and giving feedback to each Director. Mirchandani, Mr. Viren Raheja and Ms. Ameeta Parpia as Members. During the year, all the 21. auditors and Auditors’ Report recommendations made by the Audit Committee a. statutory Auditors were accepted by the Board. M/s. Nayan Parikh & Co. Chartered Accountants (Firm Registration No.107023W) were appointed C. Corporate Social Responsibility Committee as Statutory Auditors of the Company for a term of The Corporate Social Responsibility Committee 5 (five) consecutive years, at the Annual General comprises of Mr. Viren Raheja (Chairman), Meeting held on 15th September, 2017. They have Mr. Shridhar Gorthi and Mr. Rajan Gupta as confirmed their eligibility and qualifications required Members. Owing to the retirement of Mr. Devendra under the Act for holding office as Statutory Auditors Shrotri from the Board of Directors of the Company, of the Company. Mr. Viren Raheja was appointed as Chairman of the Committee with effect from 4th August, 2019. The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call D. Business Responsibility Report Committee for any further comments. The Auditors’ Report does The Business Responsibility Report Committee not contain any qualification, reservation, adverse comprises of Mr. Rajan Gupta (Chairman) and Mr. remark or disclaimer. Viren Raheja as Member.
B. secretarial Auditor As required under Regulation 34(2)(f) of SEBI The Board of Directors of the Company has appointed (LODR), your Company has published the Business M/s. Rathi & Associates to conduct Secretarial Audit Responsibility Report on its website which can be for the financial year 2019-20. The Secretarial Audit accessed through web link http://www.hathway.com/ Report for the financial year ended 31st March, About/AnnualReport. 2020 is annexed herewith marked as Annexure II to this Report. The Secretarial Audit Report does e. other Board Committees not contain any qualification, reservation, adverse In compliance with the provisions of the Act and remark or disclaimer. SEBI (LODR), the Board has constituted Nomination and Remuneration Committee, Stakeholders’ c. cost Auditor Relationship Committee and Risk Management In accordance with the provisions of Section 148(1) Committee. of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained The details of the composition, dates of meetings, cost accounts and records. attendance and terms of reference of each of the Committees are disclosed in the Corporate The Board of Directors of the Company has appointed Governance Report, which forms part of the Annual M/s. Ashok Agarwal & Co., Cost Accountant, as Report. Cost Auditor of the Company to conduct the audit of the cost records relating to ISP Operations of F. p articulars of loans given, investments the Company for the financial year 2019-20 under made, guarantees given and securities Section 148 of the Act read with the Companies provided (Cost Records and Audit) Rules, 2014. The Company, being a company providing Infrastructural facilities, is exempted from the 22. Disclosures provisions of Section 186 of the Act relating to loan A. Meetings of the Board and guarantee given, and security provided by During the financial year ended on 31st March, 2020, 7 the Company. During the year under review, the (Seven) Board Meetings were held. Further, details of the Company made an investment of ` 70,37,921/- meetings of the Board and its Committees are given in the (13,613 Equity Share of ` 10 each, at a premium Corporate Governance Report, which forms part of the of ` 507 per Equity Share) through Right Issue in Annual Report. Hathway Sai Star Cable & Datacom Private Limited.
46 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
g. under Section II of Schedule V of the Act 24. Energy Conservation, Technology Corporate Governance: (Applicable to Companies Absorption and Foreign Exchange giving remuneration as per Section II of Schedule V): Earnings and Outgo The particulars relating to conservation of energy, Particulars Rajan Gupta technology absorption, foreign exchange earnings and All elements of remuneration ` 44,113,751* outgo, as required to be disclosed under the Act, are package such as salary, benefits, provided in Annexure III to this Report. bonuses, stock options, pension, etc. of all the Directors (Applicable 25. annual Return only in case of Managing Director) As required under Section 134(3)(a) of the Act, the Details of fixed component and Fixed: extract of Annual Return in form MGT 9 is put up on the performance linked incentives ` 39,210,751* Company’s website and can be accessed at https://www. along with the performance Variable: hathway.com/assets/pdf/Annual%20Report/Extract%20 criteria ` 4,903,000 of%20Annual%20Return_31.03.2020.pdf and extract Service contracts, notice period, Nil of the Annual return in form MGT 9 for the FY 2018-19 severance fees can be accessed at https://www.hathway.com/assets/ Stock option details, if any and Nil pdf/Annual%20Report/Extract%20of%20Annual%20 whether the same has been Return_31.03.2019.pdf issued at a discount as well as the period over which accrued 26. Particulars of Employees and and over which exercisable related Disclosures *Includes provident fund of ` 12,96,000/- In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment Note: The remuneration of Mr. Rajan Gupta was revised and Remuneration of Managerial Personnel) Rules, 2014, during the year and was duly approved by the Shareholders a statement showing the names of the top ten employees through postal Ballot on 4th January, 2020. in terms of remuneration drawn and names and other H. v igil Mechanism particulars of the employees drawing remuneration in The Vigil Mechanism of the Company also excess of the limits set out in the said rules forms part of incorporates a whistle blower policy. Protected this Report. disclosures can be made by a whistle blower through Disclosures relating to remuneration and other details as an e-mail or a letter to the Compliance Officer or required under Section 197(12) of the Act read with Rule to the Chairman of the Audit Committee. The Vigil 5(1) of the Companies (Appointment and Remuneration Mechanism and Whistle Blower Policy may be of Managerial Personnel) Rules, 2014 forms part of this accessed on the Company’s website at https://www. Report. hathway.com/About/Policies. Having regard to the provisions of the second proviso During the year under review, no protected disclosure to Section 136(1) of the Act and as advised, the Annual concerning any reportable matter in accordance with Report excluding the aforesaid information is being sent the Vigil Mechanism and Whistle Blower Policy of the to the members of the Company. Any member interested Company was received by the Company. in obtaining such information may write to the Company on email id [email protected]. 23. prevention of Sexual Harashment at Work Place 27. General As per the requirement of the Sexual Harassment The Board of Directors state that no disclosure or reporting of Women at Workplace (Prevention, Prohibition & is required in respect of the following items as there were Redressal) Act, 2013 (“POSH Act”) and Rules made no transactions or applicability pertaining to these items thereunder, the Company has formed Internal Committee during the year under review: for various work places to address complaints pertaining to sexual harassment in accordance with the POSH i) Details relating to deposits covered under Chapter V Act. The Company has a policy for prevention of Sexual of the Act. Harassment, which ensures a free and fair enquiry process with clear timelines for resolution. There were no ii) Issue of equity shares with differential rights as to cases/complaints filed during the year under POSH Act. dividend, voting or otherwise.
Hathway Cable and Datacom Limited Annual Report 2019-20 47 CORPORATE OVERVIEW NOTICE Directors’ Report MANAGEMENT DISCUSSION and ANALYSIS
iii) Issue of shares (including sweat equity shares x) Issue of debentures/bonds/warrants/any other and ESOS) to employees of the Company under convertible securities. any scheme. xi) Details of any application filed for corporate iv) Significant or material orders passed by the insolvency under Corporate Insolvency Resolution Regulators or Courts or Tribunals which impact Process under the Insolvency and Bankruptcy the going concern status and Company’s operations Code, 2016. in future. xii) Instances of exercising of voting rights in respect of shares purchased directly by employees under a v) Fraud reported by the Auditors to the Audit Committee scheme pursuant to Section 67(3) of the Companies or the Board of Directors of the Company. Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014. vi) Scheme of provision of money for the purchase of its own shares by employees or by trustees for the xiii) Statement of deviation or variation in connection with benefit of employees. preferential issue.
vii) Payment of remuneration or commission from any of 28. Acknowledgement its holding or subsidiary companies to the Managing The Board of Directors would like to express their sincere Director of the Company. appreciation for the assistance and co-operation received from the financial institutions, banks, Government viii) There has been no change in the nature of business authorities, customers, vendors and members during the of the Company. year under review. The Board of Directors also wish to place on record their deep sense of appreciation for the ix) Instances of transferring the funds to the Investor committed services by the Company’s executives, staff Education and Protection Fund. and workers.
For and on behalf of the Board
sd/- sd/- Rajan Gupta Saurabh Sancheti Managing Director Non-Executive Director DIN 07603128 DIN 08349457
Place: Mumbai Date: 23rd April, 2020
Registered Office Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, Santacruz West, Mumbai 400054 CIN: L64204MH1959PLC011421 Tel No. 022-26001306 Fax No. 022-26001307 Mail: [email protected] website: www.hathway.com
48 Hathway Cable and Datacom Limited Annual Report 2019-20 ANNEXURE I CORPORATE GOVERNANCE AOC - I
Part - A REPORT ON STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES, PURSUANT TO SECTION 129 (3) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (ACCOUNTS) RULES, 2014
Reporting period : 01/04/2019 to 31/03/2020 and Reporting Currency in INR (` In Crores unless Otherwise Stated) Sr. Name of the Subsidiary Note Date of Share Reserves Total Total Investments Turnover Profit Provision Profit after Proposed % of No. Acquisition Capital and Assets Liabilities before for taxation Dividend Shareholding Surplus taxation taxation 1 Channels India Network 20/04/1995 0.09 -1.41 0.02 1.34 - 0.00 - - - NA 95.63% FINANCIAL STATEMENTS Private Limited
2 Vision India Network 07/04/1998 0.09 -2.15 0.01 2.07 - 0.00 - - - N.A 100.00% STANDALONE Private Limited 3 Liberty Media Vision 07/04/1998 0.01 -2.28 0.07 2.34 - 0.00 -0.00 - -0.00 N.A 100.00% Private Limited 4 Ideal Cables Private 07/04/1998 0.08 -0.86 0.00 0.78 - 0.00 -0.00 - -0.00 NA 100.00% Limited 5 Hathway Channel 07/04/1998 0.49 -0.16 4.16 3.83 - 0.00 -0.00 - -0.00 N.A 51.00% 5 Cable & Datacom Hathway CableandDatacom Limited Private Limited 6 Bee Network and 07/04/1998 0.10 -1.44 - 1.34 - 0.00 - - - NA 100.00% Communication Private
Limited FINANCIAL STATEMENTS 7 Elite Cable Network 07/04/1998 0.06 -0.08 - 0.02 - 0.00 - - - NA 80.00% CONSOLIDATED Private Limited 8 Binary Technology 07/04/1998 0.01 -1.65 0.00 1.64 - - - - - NA 100.00% Transfers Private Limited 9 Hathway Media Vision 13/08/1998 0.07 -1.27 3.58 4.78 1.85 0.00 -0.27 0.85 -1.12 N.A 100.00% Private Limited 10 UTN Cable 31/05/1999 0.76 -24.03 5.45 28.73 - 11.44 -1.18 - -1.18 N.A 100.00% Communications Private Limited 11 ITV Interactive Media 09/09/1999 0.08 -0.50 0.03 0.45 - 0.00 - - - N.A 100.00%
Annual Report 2019-20 Private Limited 12 Chennai Cable Vision 30/09/1999 0.18 -2.18 0.00 2.00 - 0.00 - - - NA 75.99% Network Private Limited 13 Win Cable and Datacom 15/03/2000 0.20 -19.90 0.52 20.22 - 0.00 -0.00 - -0.00 N.A 100.00% Private Limited 14 Hathway Space Vision 15/03/2000 0.01 -1.05 0.00 1.04 - 0.00 - - - NA 100.00% Cabletel Private Limited 15 Hathway Software 21/03/2000 0.76 -15.49 4.67 19.40 0.00 7.22 -2.13 - -2.13 N.A 100.00% Developers Private Limited 49 50 Reporting period : 01/04/2019 to 31/03/2020 and Reporting Currency in INR
Hathway CableandDatacom Limited `
( In Crores unless Otherwise Stated) CORPORATE OVERVIEW Sr. Name of the Subsidiary Note Date of Share Reserves Total Total Investments Turnover Profit Provision Profit after Proposed % of No. Acquisition Capital and Assets Liabilities before for taxation Dividend Shareholding Surplus taxation taxation 16 Hathway Nashik Cable 17/06/2000 0.05 -10.45 0.00 10.40 - 0.00 -0.00 - -0.00 N.A 90.06% Network Private Limited 17 Hathway Cnet Private 27/07/2000 0.10 -0.53 0.02 0.45 - 0.00 0.00 - 0.00 NA 100.00% Limited 18 Hathway United Cables 01/12/2000 0.01 -0.17 0.02 0.18 0.00 0.00 -0.00 - -0.00 NA 100.00% Private Limited 19 Hathway Internet 01/01/2001 0.01 -1.64 0.00 1.63 - - -0.00 - -0.00 NA 100.00% Satellite Private Limited 20 Hathway Krishna Cable 22/07/2002 7.81 -22.40 3.98 18.57 0.00 13.87 -0.71 - -0.71 N.A 100.00% Private Limited
Annual Report 2019-20 21 Hathway Mysore Cable 29/11/2003 1.04 -20.80 2.48 22.23 0.00 9.45 -0.38 - -0.38 N.A 100.00%
Network Private Limited NOTICE 22 Hathway Prime Cable & 03/02/2006 0.45 -0.52 0.23 0.31 - 0.00 -0.00 - -0.00 N.A 51.00% Datacom Private Limited 23 Hathway Gwalior Cable 01/05/2007 0.01 -0.59 0.05 0.63 - 0.00 -0.00 - -0.00 N.A 100.00% & Datacom Private Limited 24 Hathway Digital 01/03/2008 0.02 -4.27 0.52 4.78 - 0.00 -0.01 - -0.01 N.A 51.00% Saharanpur Cable & Datacom Private Limited 25 Hathway Enjoy Cable 07/06/2007 0.01 -0.00 0.01 0.01 - 0.00 - - - N.A 100.00% Network Private Limited Directors’ Report 26 Hathway JMD 01/05/2007 0.01 -0.01 0.01 0.00 - 0.00 - - - N.A 100.00% Farukhabad Cable Network Private Limited 27 Hathway Kokan Crystal 01/11/2011 0.15 -2.43 3.73 6.01 - 3.84 -1.49 -0.15 -1.34 N.A 96.36% Cable Network Private Limited 28 Hathway Latur MCN 15/01/2008 0.10 -0.08 1.50 1.48 - 6.86 -0.04 0.11 -0.16 N.A 51.00% Cable & Datacom Private Limited 29 Hathway MCN Private 01/06/2007 1.89 5.37 12.47 5.21 0.41 18.38 2.41 0.46 1.95 N.A 51.00%
Limited MANAGEMENT DISCUSSION 30 Hathway Sonali OM 01/06/2008 0.10 -11.47 2.39 13.77 - 2.06 1.62 - 1.62 N.A 68.00% Crystal Cable Private and Limited
31 Hathway ICE Television 15/10/2007 0.20 -0.81 1.04 1.65 - 0.00 -0.00 - -0.00 N.A 51.00% ANALYSI Private Limited 32 Hathway Digital Private 31/12/2007 355.73 -499.77 1,267.56 1,411.59 18.24 1,180.85 -20.59 -86.21 65.62 N.A 100.00% Limited 33 Net 9 Online Hathway 4 01/03/2008 0.01 2.14 3.93 1.79 - 7.59 0.12 0.06 0.06 N.A 50.00% Private Limited
Reporting period : 01/04/2019 to 31/03/2020 and Reporting Currency in INR CORPORATE GOVERNANCE (` In Crores unless Otherwise Stated) Sr. Name of the Subsidiary Note Date of Share Reserves Total Total Investments Turnover Profit Provision Profit after Proposed % of No. Acquisition Capital and Assets Liabilities before for taxation Dividend Shareholding REPORT ON Surplus taxation taxation 34 Hathway New Concept 01/09/2008 0.15 -3.51 8.21 11.57 - 4.45 -2.51 - -2.51 N.A 100.00% Cable & Datacom Private Limited 35 Hathway Sai Star Cable 01/09/2008 0.16 35.23 54.49 19.12 - 46.56 0.13 - 0.13 N.A 51.00% & Datacom Private Limited 36 Hathway Cable MCN 3 17/06/2008 3.36 -2.59 2.21 1.44 - 8.92 0.84 0.49 0.36 N.A 45.05% Nanded Private Limited
37 Hathway Palampur 01/04/2008 0.03 0.18 1.24 1.03 - - -0.13 - -0.13 N.A 51.00% FINANCIAL STATEMENTS Cable Network Private
Limited STANDALONE 38 Hathway Mantra Cable & 30/08/2008 0.01 -18.57 7.10 25.66 - 14.19 0.15 - 0.15 N.A 100.00% Datacom Private Limited 39 Hathway Dattatray Cable 13/05/2009 0.04 -5.64 6.68 12.28 - 20.69 0.67 - 0.67 N.A 51.00% Network Private Limited 40 Hathway CBN Multinet 1 01/07/2008 0.05 1.34 5.83 4.44 - 5.66 1.13 - 1.13 N.A 51.00% Private Limited
Hathway CableandDatacom Limited 41 Hathway CCN Multinet 1 01/07/2008 0.48 3.47 9.28 5.33 - 10.25 1.18 - 1.18 N.A 51.00% Private Limited 42 Hathway CCN 1 01/07/2008 0.50 0.58 5.93 4.85 - 7.53 0.04 - 0.04 N.A 51.00% Entertainment (India) Private Limited FINANCIAL STATEMENTS
43 Hathway Bhaskar CCN 1 29/09/2011 0.01 0.01 0.88 0.86 - - - - - N.A 70.00% CONSOLIDATED Multi Entertainment Private Limited 44 Hathway Bhawani 2 31/08/2009 8.10 -8.36 4.37 4.63 0.35 5.13 2.19 -1.51 3.70 N.A 51.60% Cabletel & Datacom Limited 45 Hathway Bhawani NDS 5 13/10/2010 1.55 -0.88 0.75 0.08 0.01 1.19 0.10 0.05 0.06 N.A 26.32% Network Private Limited 46 Hathway Broadband 15/10/2014 2.50 0.88 3.40 0.01 - 0.25 0.24 0.06 0.19 N.A 100.00% Private Limited Annual Report 2019-20 Notes 1 Held through subsidiary Hathway Digital Private Limited. 2 Partly held directly by Hathway Cable and Datacom Limited and partly through its subsidiary Hathway Media Vision Private Limited. 3 Held through its subsidiary Hathway MCN Private Limited and has control over the composition of the Board of Directors. 4 Subsidiary based on our Company’s right to appoint majority of Directors on the Board of the Subsidiary Company. 5 Held through subsidiary Hathway Bhawani Cabletel & Datacom Limited. 51 52 Part - B Hathway CableandDatacom Limited Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures CORPORATE OVERVIEW
(` In Crores unless otherwise stated) Sr. Name of Associates/Joint Ventures GTPL Hathway Limited Pan Cable Services Private Hathway VCN Cablenet Private Hathway SS Cable & Datacom No. (f.k.a GTPL Hathway Private Limited Limited LLP Limited) 1 Latest Audited Balance Sheet 31st March, 2020 31st March, 2020 31st March, 2020 31st March, 2020 2 Date of Acquisition 12th October, 2007 10th May, 1995 18th March, 2009 30th September, 2012 3 Shares of Associate/Joint Ventures held by the Company on the year end No. 41972694 10 12520 - Amount of Investment in Associates/ 168.75 0.00 0.10 0.00 Joint Venture Extent of Holding % 37.32% 33.33% 25.03% 51.00% Annual Report 2019-20 4 Description of how there is significant By virtue of holding more than 20% The Holding Company by virtue By virtue of control over By virtue of joint arrangement NOTICE influence of the total share capital of the of the Share Holding Agreement composition of Board of Directors of whereby the Company has joint Company. signed with JV Partners, has power the Company control and has the rights to the net to participate in the Operations and assets of the arrangement. Financial activities of the Company 5 Reason why the Associate/Joint NA NA NA NA Venture is not Consolidated 6 Networth attributable to Shareholding 260.43 -0.21 -2.02 -1.28 as per latest audited Balance sheet 7 Profit/Loss for the year
(i) Considered in Consolidation 28.75 0.00 0.00 -0.14 Directors’ Report (ii) Not Considered in Consolidation NA NA NA NA
Note: The investment in equity shares of Hathway Patiala Cable Private Limited (formerly known as Hathway Sukhamrit Cable & Datacom Private Limited) was being classified as investment in Joint Venture. However, as the Management no longer intended to exercise its influence in operations of Hathway Patiala Cable Private Limited, such equity interest in Hathway Patiala Cable Private Limited was reclassified and measured as financial assets in terms of IndAS 109 since financial year FY 2017-18.
For and on behalf of the Board
sd/- sd/- Saurabh Sancheti Rajan Gupta Director Managing Director DIN : 08349457 DIN : 07603128 MANAGEMENT DISCUSSION
sd/- and
Ajay Singh ANALYSI Head Corporate Legal, Company Secretary and Chief Compliance Officer Place: Mumbai FCS No. - 5189 Date: 23rd April, 2020
REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
ANNEXURE II
SECRETARIAL AUDIT REPORT [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2020
To, v. The following Regulations and Guidelines prescribed The Members under the Securities and Exchange Board of India Act, HATHWAY CABLE AND DATACOM LIMITED 1992 (‘SEBI Act’) to the extent applicable:- Rahejas, 4th Floor, a) The Securities and Exchange Board of India Corner of Main Avenue & V. P. Road, Santacruz West, (Prohibition of Insider Trading) Regulations, 2015; Mumbai – 400 054 b) The Securities and Exchange Board of India Dear Sirs, (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; We have conducted the Secretarial Audit of the compliance c) The Securities and Exchange Board of India (Issue of of applicable statutory provisions and the adherence to good Capital and Disclosure Requirements) Regulations, corporate governance practices by Hathway Cable and 2018; Datacom Limited (hereinafter called “the Company”). The Secretarial Audit was conducted in a manner that provided d) The Securities and Exchange Board of India (Share us a reasonable basis for evaluating the corporate conducts Based Employee Benefits)Regulations, 2014; and / statutory compliances and expressing our opinion thereon. e) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Based on our verification of the Company’s books, papers, Regulations, 2015; minute books, forms and returns filed and other records maintained by the Company and also the information vi. Provisions of the following Regulations and Guidelines provided by the Company, its officers, agents and authorized prescribed under the Securities and Exchange Board representatives during the conduct of Secretarial Audit, we of India Act,1992 (‘SEBI Act’) were not applicable to the hereby report that in our opinion, the Company has, during Company under the Financial Year under report:- the audit period covering the Financial Year ended 31st March, a) The Securities and Exchange Board of India (Issue 2020, complied with the statutory provisions listed hereunder and Listing of Debt Securities) Regulations, 2008; and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner b) The Securities and Exchange Board of India and subject to the reporting made hereinafter: (Delisting of Equity Shares) Regulations, 2009; c) The Securities and Exchange Board of India We have examined the books, papers, minute books, forms (Buyback of Securities) Regulations, 2018; and returns filed and other records maintained by Hathway d) The Securities and Exchange Board of India Cable and Datacom Limited (hereinafter called “the Company”) (Registrars to an Issue and Share Transfer Agents) for the Financial Year ended on 31st March, 2020, according to Regulations, 1993, regarding the Companies Act the provisions of: and dealing with client; and i. The Companies Act, 2013 (the Act) and the rules made vii. Provisions of the Foreign Exchange Management Act, there under; 1999 and the rules and regulations made there under ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) to the extent of External Commercial Borrowings and and the rules made thereunder; Overseas Direct Investment were not attracted to the Company under the financial year under report. iii. The Depositories Act, 1996 and the Regulations and Bye- laws framed there under; viii. We further report that, having regard to the compliance system prevailing in the Company and on examination of iv. Foreign Exchange Management Act, 1999 and the rules the relevant documents and records in pursuance thereof, and regulations made thereunder to the extent of Foreign on test-check basis, the Company has complied with the Direct Investment and Overseas Direct Investment; following laws specifically applicable to the Company:
Hathway Cable and Datacom Limited Annual Report 2019-20 53 CORPORATE OVERVIEW NOTICE Directors’ Report MANAGEMENT DISCUSSION and ANALYSIS
a) Indian Wireless Telegraphy Act, 1933; We further report that there are adequate systems and processes in the Company commensurate with the size and b) Indecent Representation of Women (Prohibition) Act, operations of the Company to monitor and ensure compliance 1986; with applicable laws, rules, regulations and guidelines. c) Telecom Regulatory Authority of India Act, 1997; We further report that during the year under review, the d) Information Technology Act, 2000. following event had a major bearing on the company’s affairs We have also examined compliance with the applicable clauses in pursuance of the above referred laws, rules, regulations, of the following: guidelines, standards, etc. referred to hereinabove: a) Secretarial Standards issued by the Institute of Company Approval of the Composite Scheme of Amalgamation and Secretaries of India under the provisions of Companies Arrangement under Section 230 to 232 read with Section 66 Act, 2013 for the Board Meetings and General Body and other relevant provisions of the Companies Act, 2013 Meetings; and between the Company, Network 18 Media & Investments b) The Listing Agreements entered into by the Company with Limited (Network18), Den Networks Limited (Den), TV18 BSE Limited and the National Stock Exchange of India. Broadcast Limited (TV18), (the Company, Den and TV18 collectively referred as Amalgamating Companies), Media18 During the financial year under report, the Company has: Distribution Services Limited (Cable Co), Web18 Digital Services Limited (ISP Co.) and Digital18 Media Limited (Digital - generally complied with the provisions of the Secretarial Co.) and their respective shareholders and creditors (Scheme) Standards referred to above; with Appointed Date 1st February 2020, at the meeting of the - complied with the provisions of the other applicable Acts, Board of Directors of the Company held on 17th February, Rules, Regulations, Guidelines etc. mentioned above. 2020, pursuant to which the Company, DEN and TV18 will amalgamate with Network18. Pursuant to this Amalgamation, We further report that: with effect from the Appointed Date, Cable, Broadband and The Board of Directors of the Company is duly constituted with Digital Businesses from Network18 will be transferred to (3) proper balance of Executive Directors, Non-Executive Directors three separate wholly owned subsidiaries of Network18, and Independent Directors including one woman director in namely Cable Co, ISP Co. and Digital Co. respectively, each compliance with the provisions of the Companies Act, 2013. on a “going concern” basis.
Except in case of meetings convened at a shorter notice, adequate Notice was given to all Directors to schedule the Board meetings and the agenda and detailed notes on For RATHI & ASSOCIATES agenda was sent atleast seven days in advance. Further, a COMPANY SECRETARIES system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for sd/- meaningful participation at the meeting. HIMANSHU S. KAMDAR PARTNER As per the minutes of the meetings, the decisions of the Board Place: Mumbai FCS: 5171 were taken unanimously. Date: 23rd April, 2020 COP: 3030
54 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
ANNEXURE III
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
A. Conservation of Energy (ii) The benefits derived like product improvement, (i) steps taken for conservation of energy: cost reduction, product development or import During the year under review, the Company was not substitution: engaged in any manufacturing or processing activity. None Considering the nature of the Company’s business, there is no reporting to be made on conservation of (iii) Information regarding imported technology energy in its operations. (Imported during last three years): The Company has not imported any technology Notwithstanding this, the Company recognises the during the last three years. importance of energy conservation in decreasing the adverse effects of global warming and climate (iv) expenditure incurred on research and change. The Company carries on its activities in an development: environmental friendly and energy efficient manner. None
(ii) steps taken by the Company for utilizing alternate C. foreign Exchange Earnings and Outgo: sources of energy: Foreign Exchange earned in terms - Nil Nil of actual inflows (Previous Year ` 1.95 crore) (iii) The capital investment on energy conservation Foreign Exchange outgo in terms - ` 44.89 crore equipment: of actual outflows Nil (Previous Year ` 54.99 crore) B. Technology Absorption (i) major efforts made towards technology absorption: The Company has not entered into any technology agreement or collaborations.
For and on behalf of the Board
sd/- sd/- Rajan Gupta Saurabh Sancheti Managing Director Non-Executive Director DIN 07603128 DIN 08349457
Place: Mumbai Date: 23rd April, 2020
Registered Office Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road, Santacruz West, Mumbai 400054 CIN: L64204MH1959PLC011421 Tel No. 022-26001306 Fax No. 022-26001307 Mail: [email protected] website: www.hathway.com
Hathway Cable and Datacom Limited Annual Report 2019-20 55 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Management Discussion & Analysis
1. GLOBAL ECONOMY OVERVIEW As a silver lining, Governments of all countries have taken The calendar year 2019 started off with rising tensions strong and bold measures to brace their economies from between the world’s two largest economies – US and the expected impact of the Corona Virus. USA started off China. US and China together account for 40% of the by rate cuts and infusing more than $1.5 Trillion into the global GDP and the trade disputes between them had financial system in an effort to calm the market turmoil an adverse effect on the global economy and sentiment after Wall Street suffered its worst day since the 1987 overall. This impact was not only seen in the commodities market crash. and financial markets (equities, bonds, currencies), but also impacted the output and profitability of firms 2. INDIAN ECONOMY OVERVIEW leading to deferred investment decisions of businesses. The Indian economy started this financial year on a dull However, as the year progressed, market sentiments note due to the ongoing liquidity crisis. In order to achieve were boosted by tentative signs on intermittent the governments vision of making India a USD 5 trillion favourable news on US-China trade negotiations. economy by 2025, the finance ministry slashed domestic corporate tax rates to 25.17% in the mid-year to spur the Brexit was the other major event that finally took place investments in the economy. As a result, the domestic on January 2020, after the public referendum in 2016 investments contributed intermittently to the India growth and years of negotiations. The impact of Brexit is story, but this proved to be a bit too little, too late. expected to hurt the UK economy primarily in 2020 by having the weakest export growth since 2009, Business The Consumer Price Index (CPI) showed retail inflation investments to contract by 0.7%, and Household rising to 7.59% in January 2020 and IIP growth stood at a spending growth predicted to be at its slowest since mere 2% YoY in January 2020, which was mainly driven 2011, due to historically low unemployment. by intermediate goods output whereas, Capital goods, infrastructure and construction goods output declined. If the pain felt across global economies was not enough in 2019, the year ended off on a worse footing with the The liquidity crunches stressed NBFC funding; interest Corona Virus being first detected in December and quickly rates hiked up, which resulted in a de growth of spreading across the world’s second-largest economy household consumption. The Indian auto sector which from the capital of Hubei province before infecting more has a valuable contribution to the economy went through than 110,000 people in at least 110 countries in less a difficult phase in the last one year primarily due to than three months. According to the WHO, the death government norms pushing to shift to BS-VI models. toll reached more than 4,000 by March 2020. From an economic perspective, the key issue was not just the The Current Account Deficit narrowed primarily on number of cases of this virus, but the level of disruption account of lower non-oil, non-gold imports and robust to economies. In a March report, the Organisation for services exports supported by software, travel and Economic Co-operation and Development, or OECD, financial services. The balance of payments surplus announced it had downgraded its 2020 predictions for stood at US$21.6bn which was supported by FPI and almost all countries, the UN Conference on Trade and FDI flows. Development went even further and predicted that global GDP could take a $2 trillion hit. The global economic Although, according to the Indian Budget 2020 the real activity from the Purchasing Manager Index for the GDP growth was estimated at 5.0% in the financial year manufacturing and the services sector showed that Both 2019-20, growing to 5.6% in financial year 2020-21, with manufacturing and services activity plunged in February recent development with regards to Covid-19 cases in 2020. The composite index was at 46.1 indicating that India, these growth estimates are expected to take a the global economy was potentially in a recession for major hit. The financial year 2021, regardless to say, is the month. going to be a challenging one for the world and India.
56 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
3. MEDIA & ENTERTAINMENT INDUSTRY 2018 2019 2020E 2022E CAGR 2019-22 Television 740 787 790 882 4% Print 305 296 301 309 1% Digital Media 169 221 279 414 23% Filmed entertainment 175 191 207 244 8% Animation and VFX 79 95 112 156 18% Live Events 75 83 94 122 14% Online Gaming 46 65 91 187 43% Out of Home Media 37 39 41 46 5% Radio 34 30 33 36 5% Music 14 15 17 20 10% Total 1,674 1,822 1,965 2,416 10%
Revenue are gross of taxes (INR in billion) for calendar year | EY estimates
The Indian Media and Entertainment (M&E) sector growth in the number of online gamers to reach around reached ` 1.82 trillion (US$25.7 billion) in 2019, 365 million. registering a growth of 9% as compared to 2018. With 2019 2022 its current trajectory, the M&E sector in India is expected Digital only 8 Mn 14 Mn to cross ` 2.4 trillion (US$34 billion) by 2022, at a CAGR Tactical digital 34 Mn 91 Mn of 10%. Bundled digital 262 Mn 363 Mn While television and print retained their positions Mass consumers 316 Mn 176 Mn as the two largest segments, digital media overtook Free consumers 190 Mn 220 Mn filmed entertainment in 2019 to become the third Source: EY Analysis March 2020 largest segment of the M&E sector. Digital subscription revenues more than doubled from 2018 levels and 4. INDIAN BROADBAND INDSUTRY digital advertising revenues grew to command 24% of In Million total advertising spend. Internet Penetration 2017 2018 2019 The sector continues to grow at a rate faster than the Total Subscribers 446 604 723 GDP, driven primarily by growth in subscription-based Broadband Subscribes 363 525 662 business models and India’s attractiveness as a content Narrow Broadband Subscribes 83 79 61 production and post production destination. Internet Penetration continued to increase by 20% and The rapid proliferation of mobile access is enabling Broadband Subscription reached 662 Mn, number of on-demand, anytime-anywhere content consumption broadband subscribers increased from 525 million to nationwide. With a population of 1.3 billion, a tele-density 662 million in December 2019 approaching 89% of households, 688 million internet subscribers and nearly 400 million smartphone users, According to IAMAI report India Internet 2019, release India’s telecom industry is poised to become the primary March 2019, 451 Mn people accessed the internet each platform for content distribution and consumption. month, and this could cross 650 mn by 2023. The growth India ranks as one of the fastest-growing app markets of the internet in India brought a new change in today’s globally, where entertainment apps are driving significant era. Businesses and company’s started growing in consumer engagement. e-commerce, social media marketing, digital advertising, e-payments, etc. Online gaming retained its position as the fastest growing segment on the back of transaction-based games mainly Top five service providers constituted 98.98% market fantasy sports, increased in-app purchases and a 31% share of the total broadband subscribers at the end
Hathway Cable and Datacom Limited Annual Report 2019-20 57 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
of Dec-19. These service providers were Reliance 5. INDIAN CABLE TELEVISION INDUSTRY Jio Infocom Ltd (370.87 million), Bharti Airtel (140.40 After New Tariff Order “NTO” implementation in February million), Vodafone Idea (118.45 million), BSNL (23.96 2019, Television universe has reset the Active Paid Pay million) and Atria Convergence (1.52 million). TV Universe In Million Broadband Segment further split between Wired 20 Subscribers 2018 2019 million increase by 11% YoY basis, which majorly Pay TV (Cable + DTH*+Hits) 161 133 comprise of consumption of the online streaming and India has 395 Mn smart phones, and around 4 mn is Free TV 36 38 connected to TV Total unidirectional TV 197 171 In Million Connected TV 2 4-5 Subscribers Dec-17 Dec-18 Dec-19 Total TV 199 175+ Wired Broadband 18 18 20 Source E & Y 2020 Wireless Broadband 345 507 641 • Net of temporally suspended subscribers Total Broadband 363 525 661 (Source E & Y 2020) television subscription at end-customer prices The top five Wired Broadband Service providers were 495 BSNL (8.39 million), Bharti Airtel (2.42 million), Atria 468 Convergence Technologies (1.52 million), Hathway Cable and Datacom (0.90 million) and Reliance Jio 449 infocom Ltd (0.86 million). 435
The top five Wireless Broadband Service providers were Reliance Jio Infocom Ltd (370.02 million), Bharti Airtel 2018 2019 2020E 2022E (137.98 million), Vodafone Idea (118.43 Million), BSNL INR billion (gross of taxes) | EY estimates (15.56 million) and MTNL (0.20 million). • Total subscription paid for television in India by service Provider Wise Market Share of Broadband viewers increased 7.5% in 2019, despite a fall in (Wired + Wireless) as on December 2019 active paid subscriptions, on account of higher ARPUs. 1.02% 0.23% • It is expected that the subscription base for 3.62% traditional unidirectional television services (cable, DTH, HITS) would keep growing as penetration 17.89% levels increase over the next few years. • Ground up analysis was done as BARC survey didn’t happen after NTO.
56.03% • This change in methodology has impacted the pay TV universe as 2019 numbers do not account 21.21% for undeclared TV households. Broadcaster share of revenues grew 10-15% due to increased number of pay channels, higher ARPU and increased share of revenues from end customers. Also, Broadcaster’s share of total subscription income increased to approximately `130 billion. Reliance JIO BSNL 6. REGULATORY FRAMEWORK Bharti Atria The Telecom Regulatory Authority of India (TRAI) Vodafone idea Others amends the New Tariff Order on 1 January 2020
The amendments have been made after TRAI issued Source: TRAI Website two Consultation Papers on “Tariff related issues for
58 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Broadcasting and Cable services” and “Issues related i. To address the concerns of broadcasters to Interconnection Regulation, 2017” in the months of regarding huge carriage fee being charged by August and September 2019 respectively. Some of DPOs, TRAI has mandated MSOs, Heads in the the major issues identified by TRAI were the ` 19 price Sky (HITS) operators, IPTV service providers will ceiling on channels that can form a bouquet, the cap on not have target market bigger than States or Union maximum discount permissible to broadcasters while Territory, as the case may be. Additionally, TRAI forming a bouquet, number of channels permitted in has proposed a cap of ` 0.4 million per month on Network Capacity Fee (NCF), applicable NCF for multi- carriage fee payable by a broadcaster to a DPO TV homes, flexibility to Distribution Platform Owners for carrying a channel. (DPOs) in offering long-term subscription plans and The amendments have significantly changed the carriage fee payable by broadcasters to DPOs. regulatory framework. However, various challenge to The following key amendments have been carried out by the same has been filed by different Stakeholders in TRAI: various High Courts across India. In some of the cases orders have been reserved by the Honourable High a. TRAI has re-introduced the “Twin-Condition” Court, while in some cases the hearing is still at interim to address the issue of huge discounts in the stage and no relief has been granted in favour of the formation of bouquets by broadcasters vis-à-vis Petitioners in one of the cases, the Hon’ble High Court sum of a-la-carte channels to ensure that price of of Kerala at Ernakulum has stayed the implementation of a-la-carte channels does not become illusionary. this provisions relating to grant of LCN to Broadcasters (i) the sum of the a-la-carte rates of the pay in perpetuity. channels (MRP) forming a part of a bouquet shall under no circumstances exceed one 7. GOVERNMEN T INITIATIVES IN THE MEDIA and a half times the rate of the bouquet of AND ENTERTAINMENT SECTOR which such pay channels are a part The government has played an active role in supporting (ii) the a-la-carte rates of each pay channel the media and entertainment sector, especially through (MRP), forming a part of a bouquet, shall various policies aimed at increasing digitization including under no circumstances exceed three times development of digital communication infrastructure. the average rate of a pay channel of the With the objective of bringing in the next generation bouquet of which such pay channel is a part technology, the government intends to hold 5G spectrum b. Additionally, the maximum retail price per month auctions in 2020-21. According to the government, 5G of a pay channel cannot exceed the maximum based technology would help in the achievement of its retail price per month of the bouquet containing Digital India vision. The economic impact of introducing that pay channel. 5G technology is estimated to reach US$1trillion by 2035. Some of the other important initiatives undertaken c. Only those channels priced at `12 or less will be by the government are given below. permitted to be part of the bouquet offered by broadcasters. National Digital Communications Policy-2018 d. Number of free standard definition channels under Both the telecommunications and the media and NCF of `130 (plus taxes) has been increased to entertainment sectors are part of the current government’s 200. Make in India plan and therefore have been given special attention. In September 2018, the government released e. Channels declared mandatory by the Ministry of the National Digital Communications Policy-2018 Broadcasting will not be included while calculating (NDCP 2018) catered towards the establishment the 200 channels in point (d). of a “ubiquitous, resilient and affordable digital f. DPOs cannot charge more than ` 160 per month communications infrastructure and services”. Its key for providing all channels available on their objectives include: (1) providing universal broadband platform. connectivity at 50 Mbps to every citizen, (2) providing 1 Gbps connectivity to all gram panchayats by 2020 g. In case of a multi-TV home, where more than one and 10 Gbps by 2022, (3) ensuring connectivity to all TV connection is registered in the name of one uncovered areas, (4) attract investments of US$100 person, a maximum fee of 40% of the declared billion in the digital communications sector, (5) training NCF will be charged for the second and additional one million manpower for building new age skills, (6) connections. expanding the Internet of Things (IoT) ecosystem to h. DPOs may offer discounts on connections for six five billion connected devices and (7) facilitating India’s months or more. effective participation in the global digital economy.
Hathway Cable and Datacom Limited Annual Report 2019-20 59 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Investment under National Infrastructure month. Besides during this year, the Company Pipeline (NIP) focussed largely to re-engineer its customer The government has targeted an investment of close to front-ending processes to make them technology `3.2 trillion in digital infrastructure over the next six years enabled, so as to drive operational efficiencies from FY20 to FY25 as part of the recently proposed NIP, and enhanced consumer experience. of which the private sector is expected to contribute The average bandwidth consumption (Mbps) per 71%. The NIP has set a goal of digital services access subscriber is 1.04. The average data usage per for all along with a two-fold strategy to achieve this goal, customer per month has now reached 188 GB namely: a) 100% population coverage for telecom and which shows customers preference of watching high-quality broadband services for socio-economic online media and reflects the binge-watching empowerment of every citizen; b) digital payments and culture of users. e-governance infrastructure for delivery of banking and public services. The Company’s technologic edge, customer centricity, unique value preposition of product FDI policy initiatives and service offerings, continuous improvement of The government has focused on liberalizing the FDI business process, optimization usage of resources regime for both telecom and media and entertainment and its lean towards digitisation and automation sectors, to attract investment for adequate infrastructure helped Company garner strong FTTH customers development. FDI limits for the telecom sector acquisition growth during the year. During the year were eased in 2013 while those for the media and under review, the Broadband business revenue ` entertainment sector were eased in 2015 and 2016. In stood at 567.7 crores and the subscribers stood June 2016, FDI limits in teleports, DTH, cable networks, at 0.97 Mn (Previous Years’ Broadband business ` mobile TV, head-in-the sky broadcasting service and revenue stood at 527.6 crores and subscribers stood at 0.81 Mn). cable networks were completely lifted, allowing 100% FDI through the automatic route. Further, there were b) Cable Television Business: no express provisions in relation to digital media in the This has been a transformational year for Cable FDI policy until 2019. However, in December 2019, FDI Television Business, post implementation of up to 26% has been permitted under the government New Tariff Order (NTO) from 1st February, 2019. approval route for uploading/streaming of news and The purpose of the new tariff order was to bring current affairs, through digital media. transparency to end customers and provide FICCI Report 19-20 them freedom to watch television of their choice and also to bring fairness in share allocation of 8. COMPANY OVERVIEW subscription revenues within the stakeholders. Hathway Cable and Datacom Limited (HCDL), is one To meet the end objective of effective of India’s leading Broadband players having 5.5 million implementation of New Tariff order and establishing Home passes and 0.97 million subscribers base. It is a sustainable renewed business model, the India’ first MSO to launch GPON FTTH service in India. Company undertook series of transformational Hathway Digital Private limited, a wholly owned initiatives. These initiatives largely thrive on our subsidiary of HCDL, is an MSO, with 6+ main head ends technological supremacy over competition to and a network of approximately 35,000 Kms of optical provide best-in-class experience to our customers fibre and coaxial cable, providing cable services to and many of these are industry first initiatives. 5.5 million viewers (including through its fellow Some of key initiatives are enumerated below: subsidiaries & JV’s) pan India and reach to 109+ cities • Enhanced our system and technical and adjoining areas. capabilities to meet customer wants to watch television of their choice. a) Broadband Business: • Enables access of Mobile Apps and Portals With deployment of GPON FTTH and Parallel to our customers and LCOs network in High Potential High Penetrated DOCSIS home passes, the Company assessed • Encouraging LCO’s to empower their an opportunity to increase market share by customers with online renewal facility offering 200-500 mbps speed to its premium • Advanced technical capability to provide consumers, which resulted in increase of minimum timely renewal notifications to customers data limits across country to 200 GB/consumer/ coupled with SMS alerts
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• Enhanced Customer order fulfillment - Your Company has successfully implemented Instant Customer Activation recommended DPO packs for all regions. Packaging is based on the extensive consumer • Unique bouquet of customer offerings – research and focused group interviews with the Android Hybrid Cable & OTT STB customers along with input from Local Cable • Automated multi-lingual Call centre Operators. In view of the NTO, the relationship providing enhanced customer service between the stakeholders has improved, which experience helped us to drive our initiatives.
c) Financial Review: ` in Crs FY20 FY19 Growth % Standalone Gross Revenue 818.0 582.5 40% EBITDA 382.0 246.0 55% EBITDA Margin 46.7% 42.2% 11% Total Comprehensive Income / (Loss) (after Tax) 16.7 211.5 -92% Consolidated Gross Revenue 2,044.1 1,619.2 26% EBITDA 681.1 369.7 84% EBITDA Margin 33.3% 22.8% 46% Total Comprehensive Income / (Loss) (after Tax) 105.5 (186.5) 157%
Standalone Revenue was at ` 818.0 crores. locations for efficient exchange of information. The steady growth was driven primarily by Entity Level Control framework document has subscription, broadband, and other Non-operating been documented. The documentation of process revenues. Total Comprehensive Income stands maps and key controls has been completed at 16.7 Cr. Consolidated Revenue stand at during previous financial year for all material ` 2044.1 and Total Comprehensive profit stand at operating processes. It has continued its efforts 105.5 Cr. to align all its processes and controls with global best practices. Company has 371 (of 31st March 2019 it was 387) st on roll employees as at 31 March 2020. The Management Audit Team (MAT) had conducted a review and evaluated the design, e) Disclosure of Internal Financial controls: adequacy and operating effectiveness of the Hathway’s internal controls are commensurate Internal Financial Controls of the Company. with its size and the nature of its operations. Management testing has been conducted on a These have been designed to provide sample basis for Revenue, Expenses & payables, reasonable assurance with regard to recording Fixed Assets, Inventory, Compliance, Related and providing reliable financial and operational Party, Borrowings, Consolidation, Contingent information, complying with applicable statutes, Liability, Loans and Advances, Cash management, safeguarding assets from unauthorised use, Current investment, Forex exposure and hedging, executing transactions with proper authorisation Finalisation, Retirement benefits and remedial and ensuring compliance of corporate policies. action has been taken or agreed upon with a Hathway has a well-defined delegation of power finite closure date where control weaknesses with authority limits for approving revenue as well were identified. as expenditure. Hathway uses a state-of-the- art enterprise resource planning (ERP) system Based on the above, the Management believes to record data for accounting and management that adequate Internal Financial Controls exist in information purposes and connects to different relation to its Financial Statements.
Hathway Cable and Datacom Limited Annual Report 2019-20 61 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
d) sWOT Analysis: Strengths Challenges Broadband: Broadband: • First MSO to Launch GPON with 300 Mbps • To retain Lower GB usage customers speed • ARPU Growth • Average data consumption 188 Gb per subscriber per month Cable: • Partnering with various content providers, • Lower paying capacity and poor infrastructure in education portals and other lifestyle improvement Phase 3 and 4 markets players • Large number of subsidiaries to manage
Cable: • 5.5. Million digital subscribers base; Offers its cable television services across 109+ cities and towns, operating in pan India regions • Implementation of Hathway connect, increase in transparency among the LCOs • Customers friendly DPO pack’s which allows to meet their daily viewing requirement. • Negotiation Power with the Broadcaster • Enhanced our system and technical capabilities to meet customer wants to watch television of their choice. • Enables access of Mobile Apps and Portals to our customers and LCOs • Encouraging LCO’s to empower their customers with online renewal facility Opportunities Threats Broadband: Broadband: • Rapid growth of the top power cities, demand for • Low end users may move to wireless service high speed connectivity fixed broadband providers due to competitive pricing • Government initiatives for Smart City • Technology Changes will lead to upgradation • Increase in Media content through OTT platform main driver for online content consumption. Cable: • Free Dish can offer stiff competition in Phase 3 Cable: and 4 Markets • Launch of Value Add Services • Geographical expansion • HD would continue to be opportunity by way of new channel launches and better regional content
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f) Risks and Concerns: Product / Technology Risk Competition Consequence: The traditional cable customer Consequence: Broadband and Cable business verticals preferences are changing and they are moving towards where Hathway is present, has low entry barriers and getting content in a non-linear manner. Inability to meet multiple players across geographies. the customer’s demand might lead to loss in business. Also Rapid advancements in technology leading to Risk Mitigation Strategy: To take early lead over obsolescence of existing assets competition, Hathway has offered cutting edge products & solutions at value for money pricing to enhance Risk Mitigation Strategy: Your company is well placed customers delight. Hathway is well poised to grow in to serve the arising needs of the customers by offering this new segment of the market. OTT & broadband services `to existing cable customers
The shift to MPEG-4 STBs in cable and provision of providing broadband through DOCSIS 3.1 /GPON network is testament to the fact that we are sensitive to the rapidly changing technology trends and are cognisant to take counter measures. Awareness Risk Consequence: LCOs function as primary facilitators of our business expansion. Therefore, delay in updating/ on boarding them on latest initiatives undertaken by the company would negate the first mover advantage.
Risk Mitigation Strategy: Your company has launched Hathway Connect portal for LCOs by imparting real- time training to help them manage their customers. Besides, there is regular collaboration with LCOs for our branding initiatives. A separate outreach initiative has been undertaken for our broadband services to ensure brand recall and educate the customers about the kind of services being offered.
g) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation: % Changes Ratio (Consolidated Basis) Mar-20 Mar-19 Remarks FY 20 FY20 Debtor Turnover Ratio 61.31 12.90 375% Shift in O2C cycle post implementation of the new Regulatory Framework for Broadcasting & cable Services sector notified by TRAI Inventory Turnover NA NA 0% Interest Coverage Ratio 1.92 1.40 38% Increase in Earnings Current Ratio 1.37 2.84 -52% Increase in Borrowing Debt Equity Ratio 0.53 0.54 -3% Operating Profit Margin 24.2% 19.8% 22% Net profit Margin 5% -12% -145% Increase in Earnings Return on Net Worth 3% -5% -155% Increase in Earnings
Hathway Cable and Datacom Limited Annual Report 2019-20 63 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Report on Corporate Governance
In accordance with Regulation 34(3) read with Schedule V induction of directors to the Board, plan for directors’ succession of SEBI (Listing Obligations and Disclosure Requirements) and provide constructive feedback and advice on performance Regulations, 2015 (including any amendments thereto) (Listing evaluation to directors. Regulations), hereinafter referred to as SEBI (LODR), the Board of Directors of Hathway Cable and Datacom Limited ETHICS/GOVERNANCE POLICIES (HCDL) have pleasure in presenting the Company’s Report At HCDL, we strive to conduct our business and strengthen containing the details of governance systems and processes our relationships in a manner that is dignified, distinctive and for the Financial Year 2019-20. responsible. We adhere to ethical standards to ensure integrity, transparency, independence and accountability in dealing with COMPANY’S PHILOSOPHY ON CORPORATE all stakeholders. Therefore, we have adopted various codes GOVERNANCE and policies to carry out our duties in an ethical manner. Some The Company’s philosophy on corporate governance oversees of these codes and policies are: business strategies and ensures fiscal accountability, ethical • Code of Conduct for Independent Director corporate behavior and fairness to all stakeholders comprising of regulators, employees, customers, vendors, investors and • Code of Conduct for Board Members and Senior the society at large. Integrity, transparency, accountability and Management Personnel compliance with laws are the basis of good governance and • Code of Practices and Procedures for Fair Disclosure of also instrumental in the Company’s robust business practices Unpublished Price Sensitive Information to ensure ethical and responsible leadership both at the Board and Management level. • Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders The Company believes in adopting the ‘best practices’ in the • Corporate Social Responsibility Policy area of corporate governance. The Company has a strong legacy of fair, transparent and ethical governance practices • Dividend Distribution Policy and in line with the same has adopted a Code of Conduct for • Succession Plan its employees and Board of Directors. • Archival Policy APPROPRIATE GOVERNANCE STRUCTURE WITH • Nomination and Remuneration Committee Policy DEFINED ROLES AND RESPONSIBILITIES The Company has put in place an internal governance structure • Prevention of Sexual Harassment Policy with defined roles and responsibilities of every constituent of • Policy on Preservation & Utilization of stationery the system. The Company’s shareholders appoint the Board of • Policy on determining material subsidiaries Directors, which in turn governs the Company. The Board has established various committees to discharge its responsibilities • Preservation of Records Policy in an effective manner. • Policy for determination of Material Events The Company has Chairman to guide the functioning of the • Risk Management Policy Board. The Company also has Managing Director (MD), who • Related Party Transactions Policy in consultation with the Chairman and Board of Directors provides overall direction and guidance to the Company. In • Vigil Mechanism Policy the operations and functioning of the Company, the MD is • Audit Committee Charter assisted by a core group of senior level executives. The MD is responsible for corporate strategy, brand equity, planning, • Director & Designated Partner Nomination Policy external contacts and all management matters. • Human Rights Policy Statement The Company Secretary assists the Chairman and MD in • Employee Welfare Policy Statement management of the Board’s administrative activities such • Responsible Marketing Policy Statement as meetings, schedules, agendas, communication and documentation. • EHS Policy Statement • Code of Conduct for Business Associates The Chairman actively works with Nomination and Remuneration Committee to plan the Board and committees’ composition, • Sustainable Development Policy
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AUDITS AND INTERNAL CHECKS AND BALANCES ROLE OF THE COMPANY SECRETARY IN M/s. Nayan Parikh & Co, Chartered Accountants, are the OVERALL GOVERNANCE PROCESS Statutory Auditors of the Company. The Statutory Auditor along The Company Secretary plays a key role in ensuring that the with the Internal Audit Function perform independent reviews of Board (including Committees thereof) procedures are followed the ongoing effectiveness of Company’s various components and regularly reviewed. The Company Secretary ensures of the systems of internal control and present the same before that all relevant information, details and documents are made the Audit Committee on quarterly basis for their review and available to the Directors and Senior Management for effective necessary action. decision-making at the meetings. The Company Secretary is primarily responsible to assist and advise the Board in the RISK MANAGEMENT, INTERNAL CONTROLS AND conduct of affairs of the Company to ensure compliance with COMPLIANCE The Board of Directors of the Company have designed Risk applicable statutory requirements, to provide guidance to Management Policy and guidelines to avoid events, situations directors and to facilitate convening of meetings. The Company or circumstances which may lead to negative impact on the Secretary interfaces and act as link between the management Company’s businesses and had defined a structured approach and regulatory authorities for governance matters. to manage uncertainty and outcomes. Key business risks and their mitigation are considered as a part of the annual/strategic BOARD OF DIRECTORS business plans and reviewed regularly by the Management. Board Leadership At HCDL, the Board has strived hard to achieve long term The Company’s internal controls are commensurate with its vision of the Company. The Board’s actions and decisions size and the nature of its operations. These have been designed are aligned with the Company’s best interests. The Board is to provide reasonable assurance with regard to recording committed to the goal of sustainably elevating the Company’s and providing reliable financial and operational information, value and brand creation. The Company has defined guidelines complying with applicable statutes, safeguarding assets and an established framework for the meetings of the Board from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. and Committee. The Company has a well-defined delegation of power with The Board critically evaluates the Company’s strategic direction, authority limits for approving revenue as well as expenditure. management policies and their effectiveness. The agenda for The Company has put in place a defined framework and state- the Board inter alia includes strategic review from each of the of-the-art enterprise resource planning (ERP) system to record Committees, a detailed analysis and review of annual operating data for accounting and management information purposes and connects to different locations for efficient exchange of plans, capital allocation and budgets. Additionally, the Board information. reviews risks and risk mitigation measures, financial reports and business reports from each of the sector heads. Frequent BEST CORPORATE GOVERNANCE PRACTICES and detailed interaction sets the agenda and provides the HCDL strives for highest Corporate Governance standards and strategic roadmap for the Company’s future growth. practices. It therefore, endeavours to continuously improve and adopt the best of Corporate Governance codes and Board Composition and Category of Directors practices. Some of the implemented best governance norms As per the provisions of Regulation 17 of SEBI (LODR), the and practices include the following: Board of Directors of the Company has optimum combination of Executive, Non-Executive and Independent Directors • All securities related filings with Stock Exchanges are comprising of 1 (One) Executive Director and 8 (Eight) Non- reviewed every quarter by the Stakeholders’ Relationship Executive Directors of which 3 (Three) are Independent Committee and the Board of Directors. Directors who are not liable to retire by rotation. The Chairman • The Company has independent Board Committees of the Company is Non-Executive, Independent Director and covering matters related to Risk Management, Stakeholder one third of the total number of directors are Independent Relationship, Business Responsibility, Directors Directors. Ms. Ameeta Parpia is the Woman Independent Remuneration and the nomination of Board Members. Director.
• The Company also has several other Executive None of the directors of the Company holds directorship in Committees of Senior Management who review the more than 8 (Eight) Listed companies or act as an Independent ongoing effectiveness of operational and financial risk Director of more than 7 (Seven) Listed companies. Further, mitigations and governance practices. none of the directors is member of more than 10 (Ten) • The Company annually undergoes Secretarial Compliance committees or chairperson of more than 5 (Five) committees Certification from an Independent Company Secretary across all Public Limited companies in which they hold the who is in whole-time practice. office of Directors.
Hathway Cable and Datacom Limited Annual Report 2019-20 65 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
The composition of the Board and other relevant details relating to directors for the financial year ended 31st March, 2020 are as under: Name of Relationship Designation Category of No. of Names of other No. of No. of post of Director With other Directorship Directorship listed entities along memberships Chairperson Directors in listed with category of in Statutory of Statutory entities directorship Committees1 Committees1 including (As per (As per this listed Regulation Regulation entity 26 of SEBI 26 of SEBI (LODR)) (LODR)) Mr. Shridhar None Chairman Independent 2 1. Glenmark 2 1 Gorthi Director Pharmaceuticals Limited - Independent Director Mr. Sasha None Director Independent 1 None 1 0 Mirchandani Director Ms. Ameeta None Director Independent 4 1. Supreme Petrochem 8 4 Parpia Director Limited - Director 2. Prism Johnson Limited - Director 3. The Supreme Industries Limited - Independent Director Mr. Akshay Brother of Mr. Director Non-Executive 2 1. EIH Associated 1 0 Raheja Viren Raheja and Non- Hotels Limited - Non- Independent Executive & Non- Director Independent Director Mr. Viren Brother of Mr. Director Non-Executive 2 1. Sonata Software 3 0 Raheja Akshay Raheja and Non- Limited - Promoter, Independent Non-Executive Director Director Mr. Saurabh None Director Non-Executive 2 1. Den Networks 1 0 Sancheti and Non- Limited - Non- Independent Executive & Non- Director Independent Director Ms. Geeta None Director Non-Executive 2 1. Den Networks 0 0 Fulwadaya and Non- Limited - Non- Independent Executive & Non- Director Independent Director Mr. Anuj None Director Non-Executive 2 1. Den Networks 0 0 Jain and Non- Limited - Non- Independent Executive & Non- Director Independent Director Mr. Rajan None Managing Executive 2 1. GTPL Hathway 2 0 Gupta Director Director Limited - Chairman (Non-Executive Director) 1 It excludes Private Companies, Foreign Companies, Companies under Section 8 of the Companies Act, 2013 and alternate directorships and for determination of limit of committees, chairpersonship and membership of the Audit Committee and Stakeholders’ Relationship Committee alone shall be considered.
Shares and Convertible Instruments Held by Non- Apart from the details mentioned hereinabove, no other Non- Executive Directors Executive Director hold any shares in the Company. There are no convertible instruments issued by the Company. The details of equity shares of the Company held by Non- Familiarisation Programmes for Board Members Executive Directors are given below: On appointment, the Directors are taken through a formal induction program including the presentation from the Sr. No. Name of the Director Shares Held Managing Director on the Company’s general business profile, 1. Mr. Akshay Raheja 121,413,000 industry in which it operates, legal, marketing, finance and 2. Mr. Viren Raheja 119,553,000 other important aspects. The Company Secretary briefs the 3. Ms. Ameeta Parpia 27,315 Directors about their legal and regulatory responsibilities as TOTAL 240,993,315 a Director. The induction for Independent Directors includes
66 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
interactive sessions with Executive Committee members, and Employees. The Code gives guidance and support needed Business and Functional Heads. for ethical conduct of business and compliance of law.
The Board Members are provided with necessary documents A copy of the Code of Conduct has been put up on the / brochures, reports, programs and internal policies to enable Company’s website. them to familiarise and get acquainted with the Company’s business, procedures and practices. The Company has obtained the confirmation of the compliance with the Code from all Board Members and Senior Periodic presentations are made at the Board and Committee Management Personnel. Meetings on business and performance updates of the Company, business strategy and risks involved. Succession Planning The Company believes that sound succession plans for the Monthly / Quarterly updates on relevant statutory and regulatory senior leadership are very important for creating a robust changes encompassing important laws are regularly circulated future for the Company. The Nomination and Remuneration to the Directors. Committee works along with the Human Resource team of the Company for a structured leadership succession plan. The details of such familiarisation programmes for Independent Directors are put up on the Company’s website. Core Skills/Expertise/Competencies Available with the Board Code of Conduct The Board comprises highly qualified members who possess The Company has in place a comprehensive Code of Conduct required skills, expertise and competence that allow them to for Board Members, Independent Directors, Senior Management make effective contributions to the Board and its Committees.
The matrix below highlights the skills and expertise required from individuals for the office of directors of the Company:
Key Skill Area Essential Desirable The Board of Directors of the Company having the requisite skills Strategy and Ability to think strategically; identify Develop effective strategies in context of Mr. Viren Raheja and Planning and critically assess strategic the strategic objectives of the Company and Mr. Saurabh Sancheti opportunities and threats. formulate relevant policies and priorities. Financial Qualifications and experience in A Chartered Accountant/ Cost Accountant Mr. Viren Raheja, Performance accounting and/or finance and with more than 10 years of experience Mr. Sasha Mirchandani analyze key financial statements having the ability to oversee budgets and and Mr. Saurabh Sancheti and critically assess financial the efficient use of resources; Oversee viability and performance. funding arrangements and accountability. Legal Qualification such as LLB or CS LLB /CS with more than 10 years of Mr. Sridhar Gorthi, and experience in legal practice experience, relevant experience in the Ms. Ameeta Parpia and with emphasis on corporate law. Industry; In-depth knowledge and practical Ms. Geeta Fulwadaya exposure to regulations applicable to the Company. Commercial A broad range of commercial / A person with a degree of Masters in Mr. Akshay Raheja, Experience business experience, preferably Business Administration or a person with Mr. Viren Raheja and in the small to medium enterprise exposure of handling a business with Mr. Rajan Gupta context, in areas including more than 15 years of experience and communications, marketing, understanding varied business environment. branding and business systems, practices and improvement. Sales and Experience in developing strategies Having in-depth knowledge about the Mr. Rajan Gupta Marketing to grow sales and market share, industry and having considerable experience in Service/ understanding of the Market needs, in sales and marketing sector, ability to Commodity sector development of Brand. enhance enterprise reputation. Information Having basic understanding of Knowledge of anticipating technological Mr. Anuj Jain Technology technology used. trends and helping in development of new business models with help of sound digital and technical understanding.
Hathway Cable and Datacom Limited Annual Report 2019-20 67 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Selection of Independent Directors Act, 2013, the financials of the Company were consolidated Considering the requirement of skill sets on the Board, eminent with RIL in accordance with the provisions of Section 129(3) people having an independent standing in their respective of the Companies Act, 2013 read with applicable accounting field / profession and who can effectively contribute tothe standards. Though this fact did not impact his status of being Company’s business and policy decisions are considered by the an Independent Director on the Board of the Company, in his Nomination and Remuneration Committee, for appointment, as opinion, it was prudent for him to step down from his position Independent Director on the Board. The Committee, inter alia, of independent director keeping in view good corporate considers qualification, positive attributes, area of expertise governance. and number of Directorship(s) and Membership(s) held in various Committees of other Companies by such persons Mr. A. Siddharth further confirmed that there was no other in accordance with the Company’s Policy for Selection of material reason for demitting his office as an Independent Directors and determining Directors’ Independence. The Director of the Company. Board considers the Committee’s recommendation and takes appropriate decision. BOARD MEETINGS, COMMITTEE MEETINGS AND PROCEDURES Every Independent Director, at the first meeting of the Board Board Decision-Making Process in which he / she participates as a Director and thereafter at The Board of Directors is the apex body constituted by the first meeting of the Board in every financial year, gives a Shareholders for overseeing the Company’s overall functioning. declaration that he/she meets the criteria of independence as The Board provides and evaluates the Company’s strategic provided under the law and that he/she is not aware of any direction, management policies and their effectiveness and circumstance or situation, which exist or may be reasonably ensures that shareholders’ long-term interests are being anticipated, that could impair or impact his / her ability to served. discharge his / her duties with an objective independent judgment and without any external influence. The Board has constituted 9 (Nine) main Committees, viz. Audit Committee, Nomination and Remuneration Committee, The Board of Directors further confirm that the Independent Stakeholders’ Relationship Committee, Corporate Social Directors on the Board of Directors of the Company fulfil the Responsibility Committee, Risk Management Committee, conditions specified in the SEBI (LODR) and are Independent Administrative-Cum-Regulatory Committee, Investment & of the management. Loan Committee, Business Responsibility Committee and Finance Committee. The Board is authorised to constitute Separate Meeting of Independent Directors other functional Committees, from time to time, depending on Pursuant to the Code of Independent Directors under the business needs. Companies Act, 2013 and the SEBI (LODR), a separate meeting of the Independent Directors of the Company was held to review The Company’s internal guidelines for Board / Committee the performance of Non-Independent Directors (including the meetings facilitate decision-making process at its meetings in Chairman) and the Board as whole. The Independent Directors an informed and efficient manner. reviewed the quality, content and timeliness of the flow of information between the Management and the Board and it’s Number of Board Meetings Committees which is necessary to effectively and reasonably During the financial year 2019-20, 7 (Seven) Board Meetings perform and discharge their duties. were held and the gap between two Board Meetings was not more than 120 days. The details of Board Meetings held during Resignation by Independent Director the year are given below: During the year, Mr. A. Siddharth, who was appointed as Sr. No. Date of Meeting Additional Director designated as Independent Director w.e.f. 5th August, 2019 demitted his office as a Director of 1. 15th April, 2019 the Company effective from 03th September, 2019. While 2. 07th June, 2019 tendering his resignation, Mr. A. Siddharth submitted that he 3. 12th July, 2019 was associated as a partner with Deloitte, Haskins & Sells 4. 04th August, 2019 (“Deloitte”), who were also the statutory auditors of Reliance 5. 16th October, 2019 Industries Limited (“RIL”) upto the financial year ended 6. 16th January, 2020 31st March, 2017. He further stated that although the th Company was not a subsidiary of RIL under the Companies 7. 17 February, 2020
68 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
The directors were given an option of attending the Board Meeting through electronic mode in terms of Rule 3(3) (b) of Companies (Meetings of Board and its Powers) Rules, 2014.
The details of attendance of Directors in Board Meetings and the last Annual General Meeting are as follows:
Name of the Director(s) No. of Board Attendance at Annual General Meeting Meetings Attended dated 31st July, 2019 Mr. Sridhar Gorthi2 5 Yes Mr. Akshay Raheja 5 Yes Mr. Viren Raheja 7 Yes Mr. Sasha Mirchandani3 3 No Ms. Ameeta Parpia4 6 No Mr. Rajan Gupta 7 Yes Ms. Geeta Fulwadaya 5 No Mr. Saurabh Sancheti 7 No Mr. Anuj Jain 3 No Mr. A. Siddharth5 0 No Mr. Devendra Shrotri6 0 No
Procedure at Committee Meetings The Company’s guidelines relating to Board meetings are applicable to Committee meetings. Each Committee has the authority to engage outside experts, advisors and counsels to the extent it considers appropriate to assist in its functioning. Minutes of proceedings of Committee Meetings are circulated to the respective Committee members and placed before Board meetings for noting. The composition and terms of reference of all the Committees are in compliance with the Companies Act, 2013 and SEBI(LODR), as applicable. The composition of the Committees is given in this Report.
COMMITTEES Audit Committee Constitution The Committee comprises of 4 (Four) Non-Executive Directors out of which 3 (Three) are Independent Directors. All the members of the Committee are financially literate and Mr. Sasha Mirchandani, who has done his Business Administration from Strayer University, USA and MMDP program at IIM, Ahmedabad, has financial management expertise. The Chairman of the Audit Committee is an Independent Director.
Composition and Number of Meetings held and Attended by Members during the financial year 2019-20 The composition of the Audit Committee and the number of meetings held and attended by each member is given as under:
Committee Members Category Designation No. of Meetings Attended attending the Meeting Mr. Sridhar Gorthi Independent Chairman 5 Mr. Viren Raheja Non-Executive & Non-Independent Member 6 Mr. Sasha Mirchandani Independent Member 3 Ms. Ameeta Parpia Independent Member 5 Mr. Devendra Shrotri6 Independent Member 0
2 & 3 Appointed respectively as additional director designated as Independent Director on 5th August, 2019 and subsequently their appointment as Independent Director was approved by the Shareholders through postal ballot on 4th January 2020. 4 Re-appointed by Board of Directors of the Company on 16th January, 2020 for 2nd term of 5 consecutive years from 11th February, 2020 to 10th February, 2025 subject to approval of shareholders of the Company. 5 Appointed as additional director designated as Independent Director on 5th August, 2019 and resigned on 3rd September, 2019 6 His term as Independent Director came to an end on 4th August, 2019
Hathway Cable and Datacom Limited Annual Report 2019-20 69 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
During the financial year 2019-20, the Audit Committee have a. Matters required to be included in the Directors’ met 6 (Six) times and the gap between two meetings was not Responsibility Statement to be included in the more than 120 days. The dates of meetings held during the Board’s Report in terms of clause (c) of sub-section financial year 2019-20 are as below: 3 of section 134 of the Companies Act, 2013. b. Changes, if any, in accounting policies and practices Sr. No. Date of Meeting and reasons for the same. th 1. 15 April, 2019 c. Major accounting entries involving estimates based 2. 07th June, 2019 on the exercise of judgment by the Management. th 3. 12 July, 2019 d. Significant adjustments made in the financial 4. 16th October, 2019 statements arising out of audit findings. th 5. 16 January, 2020 e. Compliance with listing and other legal requirements 6. 17th February, 2020 relating to financial statements.
The members were given an option of attending the meeting f. Disclosure of any related party transactions. through electronic mode in terms of Rule 3(3) (b) of Companies g. Qualifications in the draft audit report. (Meetings of Board and its Powers) Rules, 2014. • Reviewing with the management, the quarterly financial The Internal Auditors report to the Audit Committee. statements before submission to the board for approval; • Reviewing with the management, the statement of uses/ The Chairman of the Audit Committee attended the last AGM application of funds raised through an issue (public st held on 31 July 2019. issue, rights issue, preferential issue etc.), the statement of funds utilized for purposes other than those stated Attendees in the offer document/prospectus/ notice and the report The Audit Committee invites the Managing Director, Board submitted by the monitoring agency monitoring the Members and Senior Management Personnel, as it considers utilization of proceeds of a public or rights issue and appropriate to be present at its meetings. The Statutory Auditors making appropriate recommendations to the Board to and the Internal Auditors are also invited to these meetings. take up steps in this matter;
Terms of Reference • Review and monitor the auditor’s independence, Terms of Reference of the Committee inter alia include the performance and effectiveness of audit process; following: • Approval or any subsequent modification of transactions • Hold discussions with the auditors periodically about of the Company with related parties; internal control systems, the scope of audit including the • Scrutiny of inter-corporate loans and investments; observations of the auditors and review the quarterly, half- yearly and annual financial statements before submission • Valuation of undertakings or assets of the Company, to the Board and also ensure compliance of internal wherever it is necessary; control systems; • Evaluation of internal financial controls and risk management systems; • Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure • Reviewing with the management, performance of that the financial statement is correct, sufficient and statutory and internal auditors, adequacy of the internal credible; control systems; • Recommending to the Board, the appointment, • Reviewing the adequacy of internal audit function, if any, remuneration and terms of appointment, re-appointment including the structure of the internal audit department, and if required, the replacement or removal of the statutory staffing and seniority of the official heading the department, auditors; reporting structure coverage and frequency of internal audit; • Approval of payment to statutory auditors for any other services rendered by the statutory auditors; • Discussion with internal auditors on any significant findings and follow up there on; • Reviewing with the Management, the annual financial statements and auditor’s report thereon before submission • Reviewing the findings of any internal investigations by to the Board for approval, with particular reference to: the internal auditors into matters where there is suspected
70 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
fraud or irregularity or a failure of internal control systems • statement of significant related party transactions of a material nature and reporting the matter to the Board; (as defined by the audit committee), submitted by Management; • Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well • management letters / letters of internal control weaknesses as post-audit discussion to ascertain any area of concern; issued by the statutory auditors;
• To look into the reasons for substantial defaults in • internal audit reports relating to internal control the payment to the depositors, debenture holders, weaknesses; and shareholders (in case of non-payment of declared dividends) and creditors; • the appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the • To review the functioning of the Whistle Blower mechanism; Audit Committee. • Approval of appointment of Chief Financial Officer after • statement of deviations: assessing the qualifications, experience and background, etc. of the candidate; • quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock • Reviewing the utilization of loans and/ or advances from/ exchange(s) in terms of Regulation 32(1) of SEBI(LODR) investment by the holding company in the subsidiary Regulation, 2015. exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans • annual statement of funds utilized for purposes other than / advances / investments existing as on the date of coming those stated in the offer document/prospectus/notice in into force of this provision; terms of Regulation 32(7) of SEBI(LODR) Regulation, • Carrying out any other function as is mentioned in the 2015. terms of reference of the Audit Committee. • The financial statements, in particular, the investments Apart from the powers stated in the foregoing paragraph, the made by the unlisted subsidiary company. Committee further reviews the matters related to: • The details of RPTs entered into by the company pursuant • management discussion and analysis of financial to each of the omnibus approval granted, if any on a condition and results of operations; quarterly basis.
Nomination and Remuneration Committee (“NRC”) Constitution The NRC comprises of 4 (Four) members. All the members of the Committee are Non-Executive Directors out of which 2 (Two) members are Independent Directors. The Chairman of the Committee is an Independent Director.
Composition and Number of Meetings held and attended by members during financial year 2019-20 The composition of the NRC and the number of meetings attended by each member is given as under:
Committee Members Category Designation No. of meetings attended Attending the Meeting Mr. Sasha Mirchandani Independent Chairman 2 Mr. Viren Raheja Non - Executive & Non-Independent Member 3 Mr. Akshay Raheja Non - Executive & Non-Independent Member 3 Mr. Sridhar Gorthi Independent Member 3 Mr. Devendra Shrotri7 Independent Member 0
Mr. Sasha Mirchandani, being Chairman of NRC, had expressed his inability to be present at the last Annual General Meeting held on 31st July, 2019 and had therefore authorised Mr. Akshay Raheja to represent him and to answer the queries, if any.
7 His term as Independent Director came to an end on 4th August, 2019 and consequently his membership in Audit Committee also came to an end
Hathway Cable and Datacom Limited Annual Report 2019-20 71 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
During the Financial year 2019-20, the Nomination and • Identification and assessing potential individuals with Remuneration Committee have met 3 (Three) times and the respect to their expertise, skills, attributes, personal and dates are given below: professional standing for appointment and re-appointment as Directors/Independent Directors on the Board and as Sr. No. Date of Meeting Key Managerial Personnel; 1. 4th August, 2019 2. 16th October, 2019 • Support Board in performance evaluation of all the 3. 16th January, 2020 directors and annual self-assessment of the Board’s overall performance; The members were given an option of attending the meeting • Conduct annual performance review of Managing Director through electronic mode in terms of Rule 3(3) (b) of Companies (Meetings of Board and its Powers) Rules, 2014. and Senior Management Personnel; • Administration of Employee Stock Option Scheme Terms of Reference (ESOS); Terms of Reference of the Committee inter alia include the following: • Formulate the criteria for evaluation of performance of • Formulate criteria for determining qualifications, Independent Directors and the Board of Directors; positive attributes and independence of director and • Devising a policy on diversity of Board of Directors; recommendation to Board of Directors a policy relating to the remuneration of the directors, key managerial • Recommend to the Board, all remuneration, in whatever personnel and other employees; form, payable to Senior Management.
Stakeholders’ Relationship Committee (“SRC”) Constitution The SRC has been constituted to look into investor’s complaints like transfer of shares, non-receipt of declared dividends, etc. and take necessary steps for redressal thereof. The Company has taken necessary steps to adequately comply with Regulation 20 of SEBI (LODR).
Composition and Number of Meetings held and attended by members during financial year 2019-20 The composition of the SRC and details of attendance of meetings by members is as under:
Sr. No. Name of the Member Category Designation No. of meetings attended 1 Ms. Ameeta Parpia Independent Director Chairperson 3 2 Mr. Viren Raheja Non-Executive Director Member 4 3 Mr. Rajan Gupta Managing Director Member 4
During the financial year 2019-20, the Stakeholders Terms of Reference Relationship Committee have met 4 (Four) times and the Terms of Reference of the Committee inter alia include the details are given below: following:
Sr. No. Date of Meeting • Resolving the grievances of the security holders of the 1. 15th April, 2019 listed entity including complaints related to transfer/ 2. 12th July, 2019 transmission of shares, non-receipt of annual report, 3. 16th October, 2019 non-receipt of declared dividends, issue of new/duplicate 4. 16th January, 2020 certificates, general meetings etc; • Review of measures taken for effective exercise of voting The members were given an option of attending the meeting rights by shareholders; through electronic mode in terms of Rule 3(3) (b) of Companies (Meetings of Board and its Powers) Rules, 2014.
72 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
• Review of adherence to the service standards adopted Prevention of Insider Trading Code by the listed entity in respect of various services being The Company has adopted the revised Policy on Code of rendered by the Registrar & Share Transfer Agent; Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and Code of Practices • Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed and Procedures for Fair Disclosure of Unpublished Price dividends and ensuring timely receipt of dividend warrants/ Sensitive Information. Mr. Ajay Singh, Head Corporate annual reports/statutory notices by the shareholders of Legal, Company Secretary and Chief Compliance Officer is the Company. responsible for setting forth procedures and implementation on Code of Internal Procedures and Conduct for Regulating, Name and designation of the Compliance Officer Monitoring and Reporting of Trading by Insiders and Code of Mr. Ajay Singh is the Head Corporate Legal, Company Practices and Procedures for Fair Disclosure of Unpublished Secretary and Chief Compliance Officer of the Company. Price Sensitive Information.
Investor Grievance Redressal During the financial year 2019-20, one complaint was received from investors and the same was resolved satisfactorily. Therefore, there were no complaints pending as at end of the financial year.
Received from Received During 2019-20 Redressed during 2019-20 Pending as on 31.03.2020 SEBI 0 0 0 NSE 0 0 0 BSE 1 1 0 NSDL/CDSL 0 0 0 Direct from Investors 0 0 0 Total 1 1 0
Risk Management Committee Constitution The Risk Management Committee comprises of 3 members, majority members consists of Board of Directors. The Chairperson is Independent Director.
Composition and Number of Meetings held and attended by members during financial year 2019-20 The composition of the Risk Management Committee and details of attendance of meetings by members is as under:
Sr. No. Name of the Member Category Designation No. of meetings attended 1 Ms. Ameeta Parpia Independent Director Chairperson 1 2 Mr. Rajan Gupta Managing Director Member 1 3 Mr. Ajay Singh Member Member 1
During the financial year 2019-20, the Risk Management Terms of Reference Committee has met once. Terms of Reference of the Committee inter alia include the following: Sr. No. Date of Meeting • Review of strategic risks arising out of adverse business th 1. 16 January, 2020 decisions and lack of responsiveness to changes;
The members were given an option of attending the meeting • Review of operational risks; through electronic mode in terms of Rule 3(3) (b) of Companies • Review of financial and reporting risks; (Meetings of Board and its Powers) Rules, 2014. • Review of compliance risks;
Hathway Cable and Datacom Limited Annual Report 2019-20 73 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
• Review or discuss the Company’s risk philosophy and the assessing and managing the Company’s most significant quantum of risk, on a broad level that the Company, as an enterprise-wide risk exposures; organization, is willing to accept in pursuit of stakeholder • Review the Company’s portfolio of risk and consider value; it against it’s risk appetite by reviewing integration of strategy and operational initiatives with enterprise-wide • Review the extent to which management has established risk exposures to ensure risk exposures are consistent effective enterprise risk management at the Company; with overall appetite for risk; and • Inquiring about existing risk management processes and • Review periodically key risk indicators and management review the effectiveness of those processes in identifying, response thereto.
Corporate Social Responsibility (“CSR”) Committee Constitution Pursuant to Section 135 of the Companies Act, 2013, the CSR Committee comprises of three Directors, out of which one is Independent Director.
Composition and Number of Meetings held and attended by members during financial year 2019-20 The composition of the CSR Committee and details of attendance of meetings by members is as under:
Sr. No. Name of the Member Category Designation 1 Mr. Viren Raheja Non-Executive Director Chairman 2 Mr. Rajan Gupta Managing Director Member 3 Mr. Sridhar Gorthi Independent Director Member
During the financial year 2019-20, the CSR Committee did not The said criteria provide certain parameters like attendance, meet. acquaintance with business, communication inter se between board members, effective participation, domain knowledge, Terms of reference compliance with code of conduct, vision, strategy etc., which is Terms of Reference of the Committee inter alia include the in compliance with applicable laws, regulations and guidelines. following: DIRECTORS’ REMUNERATION • Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the Remuneration Policy activities to be undertaken by the Company as specified The Nomination and Remuneration Policy of the Company can in Schedule VII; be accessed on its website www.hathway.com.
• Recommend the amount of expenditure to be incurred on The salient features of the said Policy are as under: the activities referred to in clause (a); and 1) Policy for appointment and removal of Director, Key • Monitor the Corporate Social Responsibility Policy of the Managerial Personnel and Senior Management; Company from time to time. 2) Policy for remuneration of Director, Key Managerial Personnel and Senior Management; Recommendation by any Committee of the Board of Directors of the Company 3) Policy for performance evaluation of Board of Directors of During financial year 2019-20, the Board of Directors ofthe the Company; Company has accepted all recommendations, received from 4) Policy on Diversity of Board of Directors of the Company. its Committees. The Company’s Remuneration Policy is directed towards Performance Evaluation Criteria for Directors rewarding performance based on review of achievements The Board has devised criteria for evaluation of the periodically. The Remuneration Policy is in consonance with performance of the Directors including Independent Directors. industry practice.
74 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
I. Remuneration of Management Staff Details of the sitting fees paid during the financial year Remuneration of Employees largely consists of basic 2019-20 are as under: remuneration and perquisites. The components of the total remuneration vary based on the grades and are governed Sl. No. Name of Director Sitting Fees (in `) by industry patterns, qualifications and experience of the 1 Mr. Akshay Raheja 250,000 employee, responsibilities handled by him, his individual performance, etc. 2 Ms. Ameeta Parpia 500,000 3 Mr. Sasha Mirchandani 270,000 II. Remuneration of Directors 4 Mr. Sridhar Gorthi8 450,000 Independent and Non-Executive Directors 5 Mr. Viren Raheja 590,000 Independent and Non-Executive Directors of the Company receive sitting fees for attending Board Meetings while no 6 Ms. Geeta Fulwadaya 250,000 sitting fee is paid for attending Committee Meeting except 7 Mr. Saurabh Sancheti 350,000 Audit Committee. The sitting fees paid to Independent and 8 Mr. Anuj Jain 150,000 Non-Executive Directors is within the limits prescribed under the Companies Act, 2013. Grand Total 2,810,000
Executive Director As of 31st March, 2020, Mr. Rajan Gupta, Managing Director is the only Executive Director of the Company.
Details of remuneration paid to Mr. Rajan Gupta during the financial year ended 31st March, 2020 is given below:
Name of the Executive Designation Salary & Incentive (`) Others Total Director Perquisites (`) (Provident Fund) (`) Rajan Gupta Managing Director 37,914,751 4,903,000 1,296,000 44,113,751
The remuneration of Mr. Rajan Gupta was revised during the of HDPL does not contain any qualification, reservation or year and was duly approved by the Shareholders through adverse remark or disclaimer. postal ballot as on 4th January 2020. His revised terms of remuneration are available on Company’s website. The Company monitors performance of subsidiary companies, inter alia, by the following means: Framework for Monitoring Subsidiary • Financial statements, in particular investments made by Companies Subsidiary Companies, are reviewed quarterly by the During the year under review, Hathway Digital Private Limited Company’s Audit Committee. (HDPL) is a material subsidiary of the Company as per • Minutes of Board meetings of Subsidiary Companies are SEBI (LODR). placed before the Company’s Board regularly.
In terms of the provisions of Regulation 24(1) of SEBI • A statement containing all significant transactions and (LODR), Ms. Ameeta Parpia is the Independent Director arrangements entered into by Subsidiary Companies is of the Company on the Board of HDPL. The Company is placed before the Company’s Board. in compliance with Regulation 24A of SEBI (LODR). The • Presentations are made to the Company’s Board on Company’s unlisted material subsidiary has undergone business performance by the senior management on Secretarial Audit. major Subsidiaries of the Company.
Copy of Secretarial Audit Report of HDPL is available on The Company’s Policy for determining Material Subsidiaries is the website of the Company. The Secretarial Audit Report put up on the Company’s website.
8 Payment made to Trilegal & Sunshine Foundation
Hathway Cable and Datacom Limited Annual Report 2019-20 75 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
GENERAL BODY MEETINGS Annual General Meeting Location, time and date of holding of the last 3 (three) Annual General Meetings Financial Year Date of AGM Venue Time 2016-17 15.09.2017 ISKCONs Auditorium, Hare Krishna Land, 3:00 pm Next to Hare Krishna Temple, Juhu, Mumbai 400049 2017-18 11.09.2018 ISKCONs Auditorium, Hare Krishna Land, 3:00 pm Next to Hare Krishna Temple, Juhu, Mumbai 400049 2018-19 31.07.2019 ISKCONs Auditorium, Hare Krishna Land, 3:00 pm Next to Hare Krishna Temple, Juhu, Mumbai 400049
Special Resolutions passed during previous 3 (three) Annual General Meetings Date of AGM Particulars of Special Resolutions Passed 15.09.2017 Nil 11.09.2018 Nil 31.07.2019 Alteration of the Articles of Association of the Company
Location, time and date of holding of the Extra Ordinary General Meeting of the Company for the financial year 2019-20 Date of EGM Venue Time NA NA NA
Postal Ballot During the financial year 2019-20, the Company conducted a postal ballot exercise for seeking approval of members. Shareholders of the Company were provided e-voting facility for casting their votes electronically on the resolutions proposed through postal ballot process. The details of postal ballot exercise undertaken by the Company during the financial year 2019-20 are as under:
Postal Ballot Notice dated Resolutions proposed 29th November, 2019 1. Special Resolution to approve the revision in the remuneration of Mr. Rajan Gupta as Managing Director of the Company for his present term 2. Special Resolution to approve the appointment of Mr. Sridhar Gorthi as an Independent Director of the Company 3. Special Resolution to approve the appointment of Mr. Sasha Mirchandani as an Independent Director of the Company
Other details of Postal Ballot Process
Postal Ballot Cut Off date Date of Date of Commencement Last date of Date of Notice dated dispatch of publication of E-voting receiving of declaration notice of dispatch postal ballot of results of notice in / e-voting by newspapers Scrutinizer 29th November, 29th November, 5th December, 6th December, 6th December, 4th January, 6th January, 2019 2019 2019 2019 2019 2020 2020
76 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Postal Ballot process iv. The voting (either physically or through electronic mode) under the postal ballot was kept open for a period of 30 i. Mr. Himanshu S. Kamdar, Practicing Company Secretary days from the date of dispatch of postal ballot notice. was appointed as the Scrutinizer for submitting report on voting pattern on the resolutions proposed to be passed v. Particulars of postal ballot forms received from the through aforesaid postal ballot carried out. members using the electronic platform of Central Depository Services (India) Limited were entered in a ii. The Directors and/or the Company Secretary of the register separately maintained for the purpose. Company were severally authorized to conduct the postal vi. The postal ballot forms were kept under safe custody of the ballot process. Scrutinizer in sealed and tamper proof ballot boxes before commencing the scrutiny of such postal ballot forms. iii. The Company had dispatched Postal Ballot Notice, together with the Explanatory Statement along with vii. All postal ballot forms received up to the closure of working forms and postage prepaid business reply envelopes hours of the last date and time fixed by the Company for to all the shareholders whose name(s) appeared on the receipt of the forms, was considered by the Scrutinizer and postal ballot forms received thereafter were not Register of Members/list of beneficiaries as on cut-off considered by the Scrutinizer. date. The said Notice was dispatched through electronic mode in case of registered email ids available with the viii. Details of voting pattern Registrar and Transfer Agents and in other cases through Below is the summary of the voting result on the special physical mode. resolutions passed:
For Resolution No. 1: Sr. Particulars Resolution 1 No. No. of Ballots/Remote No. of E-Voting confirmations Shares voted a. Votes casted through ballots 63 22,585 b. Remote e-voting Confirmations received 86 1,700,157,711 Total 149 1,700,180,296 c. Less: Invalid Ballots / Remote e-Voting confirmations 13 6,914 d. Net Valid Ballots / Remote e-Voting confirmations 136 1,700,173,382 (i) Physical Ballots / Remote e-voting confirmations with assent for the Resolution 111 1,700,074,908 % of Assent 99.99 (ii) Physical Ballots / Remote e-voting confirmations with dissent for the Resolution 25 98,474 % of Dissent *0.01 *Rounded off to nearest number
For Resolution No. 2: Sr. Particulars Resolution 2 No. No. of Ballots/Remote No. of E-Voting confirmations Shares voted a. Votes casted through ballots 61 22,415 b. Remote e-voting Confirmations received 87 1,700,157,811 Total 148 1,700,180,226 c. Less: Invalid Ballots / Remote e-Voting confirmations 13 6,914 d. Net Valid Ballots / Remote e-Voting confirmations 135 1,700,173,312 (i) Physical Ballots / Remote e-voting confirmations with assent for the Resolution 121 1,700,062,757 % of Assent 99.99 (ii) Physical Ballots / Remote e-voting confirmations with dissent for the Resolution 14 110,555 % of Dissent *0.01 *Rounded off to nearest number
Hathway Cable and Datacom Limited Annual Report 2019-20 77 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
For Resolution No. 3: Sr. Particulars Resolution 3 No. No. of Ballots/Remote No. of E-Voting confirmations Shares voted a. Votes casted through ballots 61 22,415 b. Remote e-voting Confirmations received 87 1,700,157,811 Total 148 1,700,180,226 c. Less: Invalid Ballots / Remote e-Voting confirmations 13 6,914 d. Net Valid Ballots / Remote e-Voting confirmations 135 1,700,173,312 (i) Physical Ballots / Remote e-voting confirmations with assent for the Resolution 118 1,700,062,643 % of Assent 99.99 (ii) Physical Ballots / Remote e-voting confirmations with dissent for the Resolution 17 110,555 % of Dissent *0.01 *Rounded off to nearest number
DISCLOSURE ON MATERIALLY SIGNIFICANT for reporting illegal or unethical behaviour. The Company has RELATED PARTY TRANSACTIONS THAT MAY HAVE a Vigil Mechanism and framed a Whistle Blower Policy under POTENTIAL CONFLICT WITH THE COMPANY’S which the employees are encouraged to Policy violations of INTERESTS AT LARGE applicable laws and regulations and the Code of Conduct The Company’s major related party transactions are generally - without fear of any retaliation. The Company’s personnel with its Subsidiaries. The related party transactions are entered have access to the Chairman of the Audit Committee in cases into based on considerations of various business exigencies, such as concerns about unethical behavior, frauds and other optimization of market share, profitability, legal requirements, grievances. No personnel of the Company have been denied liquidity and capital resources of subsidiaries. access to the Audit Committee.
All the contracts / arrangements / transactions entered by the Prevention of Sexual Harassment of Company during the financial year with related parties were in Women at Workplace its ordinary course of business and on an arm’s length basis. The Company is committed to provide a work environment that During the year, the Company had not entered into any ensures every employee is treated with dignity, respect and contract / arrangement / transaction with related parties which afforded equal treatment. The Company has complied with could be considered material in accordance with the policy of the provision relating to the constitution of Internal Complaints the Company on Materiality of Related Party Transactions. The Committee and during the year under review, the Company has Company has made full disclosure of transactions with the not received any complaints under the Sexual Harassment of related parties as set out in Note 4.13 of Standalone Financial Women at Workplace (Prevention, Prohibition and Redressal) Statements, which forms part of the Annual Report. Act, 2013.
There are no transactions of material nature with Directors/ Number of Number of Number of Promoters or any related entity, which will have any potential Complaints filed Complaints Complaints conflict with the interests of the Company at large. during FY 2019-20 disposed of during pending as on The Company’s Policy on Materiality of Related Party FY 2019-20 FY 2019-20 Transactions and on dealing with Related Party Transactions 0 0 0 is put up on the Company’s website. Adoption of Mandatory and Discretionary Details Of Non-Compliance By The Requirements Company The Company has complied with the mandatory requirements There has not been any non-compliance by the Company and of the Corporate Governance Clause of SEBI (LODR). no penalties or strictures were imposed by the Stock Exchanges, The Company has not implemented the non-mandatory SEBI or any other statutory authority in relation to any matter requirements as specified in Part E of Schedule II of SEBI connected to capital markets, during the last three years. (LODR).
Whistle Blower Policy Audit Qualification The Company promotes safe, ethical and compliant conduct The Company is in the regime of unmodified opinions on of all its business activities and has put in place a mechanism financial statements.
78 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Means of Communication For matters related to Share transfers, Dematerialization etc.: i. All the vital information relating to the Company like Link Intime India Private Limited quarterly results, annual results, official press releases, presentations, if any, made to Institutional Investors C-101, 247 Park, LBS Marg, Vikroli West, Mumbai-400083 Tel: (022) 49186000 or Analysts are posted on the website of the Company Fax : (022) 49186060 www.hathway.com on timely basis. ii. The quarterly and annual financial result of the Company Registrar and Transfer Agents Link Intime India Private Limited is published in Mumbai Lakshadeep (Marathi Newspaper) C-101, 247 Park, LBS Marg, Vikhroli West, Mumbai-400083 and Financial Express (English Newspaper). The said Tel: (022) 49186000 financial result is further submitted to the National Stock Fax : (022) 49186060 Exchange of India Limited and BSE Limited. Share Transfer System iii. The Management Discussion and Analysis Report is SEBI has mandated that, effective 1st April, 2019, no share enclosed and forms part of the Annual Report. can be transferred in physical mode. Hence, the Company has stopped accepting any fresh lodgement of transfer of shares in GENERAL SHAREHOLDER INFORMATION physical form. The Company had sent communication to the Date, Time And Venue of Annual General Meeting of shareholders encouraging them to dematerialise their holding Shareholders in the Company. The communication, inter alia, contained The Annual General Meeting of the Company would be held procedure for getting the shares dematerialised. Shareholders on Friday, September 25, 2020 at 12 pm I.S.T electronically holding shares in physical form are advised to avail the facility and the registered office will be deemed to be the venue of the of dematerialisation. Annual General Meeting, subject to confirmation under present lockdown situation due to Covid-19 pandemic and relaxation During the year, the Company had obtained, on half-yearly as provided by MCA. basis, a certificate, from a Company Secretary in Practice, certifying that all certificates have been issued within thirty days of the date of lodgement of the transfer (for cases Financial Year lodged prior to 1st April, 2019), sub-division, consolidation and The Company follows April-March as its financial year. The renewal as required under Regulation 40(9) of SEBI (LODR) results for every quarter beginning from April are declared as and filed a copy of the said certificate with the Stock Exchanges. per the SEBI (LODR). Trading in equity shares of the Company is permitted only in dematerialised form. Dividend Payment Date The Board of Directors of the Company have not recommended Plant Locations any dividend for the financial year ended 31st March, 2020. The Company is not engaged in manufacturing activities.
Listing Information Payment of Listing Fees The Company’s equity shares are listed on National Stock Annual listing fee for the financial year 2020-21 shall be paid Exchange of India Limited and BSE Limited. by the Company to BSE Limited and National Stock Exchange of India Limited. National Stock Exchange of India Limited Address: Exchange Plaza, C-1, Block G, Payment of Depository Fees Bandra Kurla Complex, Bandra (East), Mumbai-400051 Annual Custody / Issuer fee is being paid by the Company within (Code: HATHWAY) the due date based on invoices received from the Depositories.
BSE Limited Fees Paid to Statutory Auditor ` Address: P.J. Towers, 1st Floor, Dalal Street, Mumbai-400001 During the year, an amount of 98,55,100/- (Rupees Ninety (Code: 533162) Eight Lakhs Fifty Five Thousand and One Hundred only) was paid to M/s. Nayan Parikh & Co., the Statutory Auditors of the ISIN: INE982F01036 Company for all services rendered by it to the Company, its subsidiaries, and all entities in the network firm/network entity of which the statutory auditors is a part, on a consolidated basis. Address for Correspondence For General Correspondence: Credit Rating Mr. Ajay Singh-Head Corporate Legal, Company Secretary and As per India Ratings & Research, the Company’s current credit Chief Compliance Officer rating is as under: 805/806, Windsor, Off C.S.T Road, Kalina, Santacruz (East), 1) IND AAA (Long term)/Stable Mumbai-400098. 2) IND A1+ (Short term)
Hathway Cable and Datacom Limited Annual Report 2019-20 79 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Details of Utilization of Funds Raised through Preferential Allotment During the financial year 2018-19, the Company had raised funds through following 2 (two) preferential allotments:
Sr. No. Date of Allotment Name of the Allottee Number of Equity Shares Amount (`) 1. 29/08/2018 Hathway Investments Private Limited 30,800,000 996,380,000 2. 30/01/2019 Jio Content Distribution Holdings Private Limited 534,698,609 17,297,500,001 3. 30/01/2019 Jio Internet Distribution Holdings Private Limited 214,296,755 6,932,500,024 4. 30/01/2019 Jio Cable and Broadband Holdings Private Limited 159,814,636 5,170,003,475 TOTAL 939,610,000 30,396,383,500
The details of utilization of funds during the year are as follows:
Sr. No. Purpose Amount Utilized (`) 1 General Corporate Purpose 996,380,000 Balance to be utilized 29,400,003,500
STOCK MARKET PRICE DATA National Stock Exchange of India Limited Monthly High and Low of Closing prices of the Company’s Equity Shares traded at National Stock Exchange of India Limited for the financial year ended 31st March, 2020 is given below:
Performance in comparison to NSE Nifty Month NSE Nifty (High) NSE Nifty (Low) High Price Low Price Apr 2019 11856.15 11549.1 31.55 27.5 May 2019 12041.15 11108.3 31.7 21.65 Jun 2019 12103.05 11625.1 25.45 22.1 Jul 2019 11981.75 10999.4 25 19.75 Aug 2019 11181.45 10637.15 38.45 17.55 Sep 2019 11694.85 10670.25 34.5 20.6 Oct 2019 11945 11090.15 23.7 18.7 Nov 2019 12158.8 11802.65 22.3 19.6 Dec 2019 12293.9 11832.3 22.2 18.65 Jan 2020 12430.5 11929.6 23.9 18.65 Feb 2020 12246.7 11175.05 26.35 17.55 Mar 2020 11433 7511.1 20.9 10.5
Monthly High-Low Share Price / NSE NIFTY 50
50 16250 HCDL High 40 NSE High 30 11250 20 HCDL Low
10 N S E ifty 50
P rice of Shares NSE Low 0 6250 Jul ’19 Oct ’19 Apr ’19 Jun ’19 Jan ’20 Mar ’20 Feb ’20 Nov ’19 Dec ’19 Aug ’19 Sep ’19 May ’19 Month
80 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
BSE Limited Monthly High and Low of closing prices of the Company’s Equity Shares traded at BSE Limited for the financial year ended 31st March, 2020 is given below:
Performance in comparison to BSE Sensex Month BSE SENSEX (High) BSE SENSEX (Low) High Price Low Price Apr 2019 39487.45 38460.25 31.5 27 May 2019 40124.96 36956.1 31.7 23.95 Jun 2019 40312.07 38870.96 26.15 22.2 Jul 2019 40032.41 37128.26 25 19.75 Aug 2019 37807.55 36102.35 38.6 17.55 Sep 2019 39441.12 35987.8 34.4 20.45 Oct 2019 40392.22 37415.83 23.7 18.8 Nov 2019 41163.79 40014.23 22.15 19.5 Dec 2019 41809.96 40135.37 22.8 18.8 Jan 2020 42273.87 40476.55 23.95 18.7 Feb 2020 41709.3 38219.97 26.35 17.65 Mar 2020 39083.17 25638.9 19.55 10.7
Monthly High-Low Share Price / BSE SENSEX
50 45000 HCDL High 40000 40 35000 BSE High 30000 30 25000 20 20000 HCDL Low 15000
10 10000 BS E Sensex
P rice of Shares BSE Low 5000 0 0 Jul ’19 Oct ’19 Apr ’19 Jun ’19 Jan ’20 Mar ’20 Feb ’20 Nov ’19 Dec ’19 Aug ’19 Sep ’19 May ’19 Month
Distribution of Shareholding as on 31st March, 2020 Range No. of % of Total Share Amount % of Total Shareholders Share holders (`) Share Capital 1 – 1000 28,347 79.4234 8,203,106 0.2317 1001 – 2000 3,548 9.9409 6,139,486 0.1734 2001 – 4000 1,810 5.0713 5,844,286 0.1651 4001—6000 633 1.7736 3,303,498 0.0933 6001 – 8000 303 0.8490 2,209,844 0.0624 8001 – 10000 313 0.8770 3,026,766 0.0855 10001--20000 382 1.0703 5,770,846 0.1630 20001 & above 355 0.9946 3,505,711,168 99.0255 Total 35,691 100.00 3,540,209,000 100.00
Hathway Cable and Datacom Limited Annual Report 2019-20 81 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Category wise Distribution Schedule as on 31st March, 2020 Sr. No. Category No. of Shares held % 1. Directors 240,993,315 13.61 2. Corporate Bodies (Promoter Companies) 1,424,596,230 80.48 3. Clearing Members 1,227,646 0.07 4. Other Bodies Corporate 9,448,353 0.53 5. Financial Institutions 2,656,710 0.15 6. Foreign Portfolio Investors (Corporate) 45,299,315 2.55 7. Mutual Funds 1,484 0.00 8. Financial Institutions 536,982 0.03 9. Non-Resident Indians 11,909,990 0.66 10. Public 29,724,498 1.67 11. Hindu Undivided Family 1,123,686 0.05 12. Insurance Companies 2,118,220 0.12 13. Nationalised Banks 1,508 0.00 14. Alternate Investment Funds 3,123,273 0.17 Total 1,770,104,500 100.00
Dematerialization of Shares and Liquidity The shares of the Company are compulsorily in demat segment and are available for trading in the depository systems of both the depositories i.e. National Securities Depository Limited and Central Depository Services (India) Limited under the ISIN INE982F01036.
As on 31st March, 2020, except 15 equity shares, all the shares are held in dematerialized form.
Gdr’s/Adr’s/Warrants or any Convertible Instruments The Company has not issued any GDR’s/ADR’s/Warrants or any convertible instruments pending conversion and hence it does not have any outstanding GDR’s/ADR’s/Warrants or any convertible instruments pending conversion likely to impact the Equity Share Capital of the Company.
Details as per Clause F of Schedule V of SEBI (LODR) Disclosures with respect to Demat Suspense Account/Unclaimed Suspense Account:
Aggregate number of Details of Shareholders Details of Shareholders to Aggregate number shareholders and the approached during whom the shares have been of shareholders and outstanding shares in the FY 2019-20 for claiming transferred during outstanding shares in the suspense account lying of shares FY 2019-20 suspense account lying as as on 1st April, 2019 on 31st March, 2020 No. of No. of No. of No. of No. of No. of No. of No. of shareholders Shares shareholders Shares shareholders Shares shareholders Shares 11 4,250 - - - - 11 4,250
Note: Shareholders may please note that voting rights on the said shares shall remain frozen till the rightful owner of such shares claims the same.
Employee Stock Options During the year under review, no shares have been allotted under Employee Stock Options Scheme.
Disclosure of Commodity Price Risks and Commodity Hedging Activities The Company does not deal in commodities.
82 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Weblinks for the Matters Referred in this Report are as under Particulars Website link Composition of Board of Directors https://www.hathway.com/About/AboutUs Composition of various Committees of the Board https://www.hathway.com/About/ComplianceReport#/2019-2020 and their terms of reference Familiarization Programme for Independent https://www.hathway.com/assets/pdf/Compliance%20Report/2019-2020/ Directors Directory/Familiarization%20Programme_2019-20.pdf Code of Conduct https://www.hathway.com/About/Policies Remuneration Policy for Directors, https://www.hathway.com/About/Policies Key Managerial Personnel and other employees Policy for selection of Directors and determining https://www.hathway.com/About/Policies Directors’ independence Policy for determining Material Subsidiaries https://www.hathway.com/About/Policies Policy on Materiality of Related Party Transactions https://www.hathway.com/About/Policies and on dealing with Related Party Transactions Policy on Determination and Disclosure of Materiality https://www.hathway.com/About/Policies of Events and Information and Web Archival Policy Vigil Mechanism Policy https://www.hathway.com/About/Policies Quarterly, Half-yearly and Annual Financial Results https://www.hathway.com/About/QuarterlyFinancialResults#/panel4/q4 Presentation to Investor https://www.hathway.com/About/CorporatePresentation Annual Report https://www.hathway.com/About/AnnualReport
Compliance with Regulation 17 to 27 and Clauses (B) to (I) of Sub-Regulation (2) of Regulation 46 of SEBI (LODR) The Company has on a timely basis disclosed the compliance as specified in regulation 17 to 27 and clauses (b) to (i)of sub-regulation (2) of regulation 46 of SEBI (LODR).
Sr. Particulars Regulation Compliance Status Key Compliance observed No. Yes / No / N.A. 1. Board of Directors 17 Yes • Composition and Appointment of Directors • Meetings and quorum • Review of compliance reports • Plans for orderly succession for appointments • Code of Conduct • Fees / compensation to non-executive Directors • Minimum information to be placed before the Board • Compliance Certificate by CEO and CFO • Risk assessment and risk management plan • Performance evaluation of Independent Directors • Recommendation of Board for each item of special business 2. Maximum Number 17A Yes • Directorships in listed entities of Directorships 3. Audit Committee 18 Yes • Composition • Meetings and quorum • Chairperson present at Annual General Meeting • Role of the Committee
Hathway Cable and Datacom Limited Annual Report 2019-20 83 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Sr. Particulars Regulation Compliance Status Key Compliance observed No. Yes / No / N.A. 4. Nomination and 19 Yes • Composition Remuneration • Chairperson present at Annual General Meeting Committee • Meetings and quorum • Role of the Committee 5. Stakeholders’ 20 Yes • Composition Relationship • Chairperson present at Annual General Meeting Committee • Meetings • Role of the Committee 6. Risk Management 21 Yes • Composition Committee • Meetings • Role of the Committee 7. Vigil Mechanism 22 Yes • Vigil Mechanism for Directors and employees • Adequate safeguards against victimisation • Direct access to Chairperson of Audit Committee 8. Related Party 23 Yes • Policy on Materiality of Related Party transactions and dealing Transactions with Related Party Transactions • Prior approval including omnibus approval of Audit Committee for Related Party Transactions • Periodical review of Related Party transactions • Disclosure on Related Party Transactions 9. Subsidiaries of the 24 Yes • Appointment of Company’s Independent Director on the Board Company of material subsidiary • Review of financial statements and investments of subsidiary by the Audit Committee • Minutes of the Board of Directors of the subsidiaries are placed at the meeting of the Board of Directors • Significant transactions and arrangements of subsidiary are placed at the meeting of the Board of Directors 10. Secretarial Audit 24A Yes • Annual Secretarial Audit Report and Annual Secretarial Compliance Report • Secretarial Audit Report of material unlisted subsidiary incorporated in India 11. Obligations 25 Yes • Maximum directorships and tenure with respect to • Meetings of Independent Directors Independent • Cessation and appointment of Independent Directors Directors • Familiarisation of Independent Directors • Declaration from Independent Directors that he / she meets the criteria of independence • Directors and Officers insurance for all the Independent Directors
84 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Sr. Particulars Regulation Compliance Status Key Compliance observed No. Yes / No / N.A. 12. Obligations 26 Yes • Memberships / Chairmanships in Committees with respect • Affirmation on compliance of Code of Conduct by Directors and to employees Senior Management including Senior • Disclosure of shareholding by non-executive Directors Management, • Disclosures by Senior Management about potential conflicts of Key Managerial interest Personnel, • No agreement with regard to compensation or profit sharing in Directors and connection with dealings in securities of the Company by Key Promoters Managerial Personnel, Director and Promoter 13. Other Corporate 27 Yes • Compliance with discretionary requirements Governance • Filing of quarterly, half-yearly and yearly compliance report on requirements Corporate Governance 14 Website 46(2)(b) Yes • Terms and conditions of appointment of Independent Directors to (i) • Composition of various Committees of the Board of Directors • Code of Conduct of Board of Directors and Senior Management Personnel • Details of establishment of Vigil Mechanism / Whistle-blower policy • Policy on dealing with Related Party Transactions • Policy for determining material subsidiaries • Details of familiarisation programmes imparted to Independent Directors
No Disqualification Certificate from CEO/CFO CERTIFICATION Company Secretary In Practice As required under Part B of Schedule II read with Regulation The Company has obtained a Certificate from M/s. Rathi and 17(8) of SEBI (LODR), the Managing Director and Chief Associates, Company Secretaries that none of the Directors on Financial Officer of the Company have certified to the Board the Board of the Company have been debarred or disqualified regarding their review on the Financial Statements, Cash Flow from being appointed or continuing as Directors of Companies Statement and other matters related to internal controls in the by the Board/Ministry of Corporate Affairs or any such statutory prescribed format for the year ended 31st March, 2020. authority, which forms part of this Report as Annexure - A. CODE OF CONDUCT DECLARATION Annual Secretarial Compliance Report Pursuant to the provisions of SEBI (LODR), the Board Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019 Members and Senior Management Personnel of the Company dated 8th February, 2019, the Company has obtained an Annual have confirmed that they have complied with the Code of Secretarial Compliance Report from M/s. Rathi & Associates, Conduct of the Company for the financial year 2019-20. Practicing Company Secretary, confirming compliance of SEBI Regulations / Circulars/ Guidelines issued thereunder sd/- and applicable to the Company. There are no observations or Rajan Gupta adverse remarks in the said report. Place: Mumbai Managing Director Date: 23rd April, 2020 DIN: 07603128
Hathway Cable and Datacom Limited Annual Report 2019-20 85 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
To, The Members, HATHWAY CABLE AND DATACOM LIMITED
Corporate Governance Certificate
We have examined the compliance of conditions of Corporate Governance by HATHWAY CABLE AND DATACOM LIMITED (“the Company”) for the financial year ended 31st March, 2020, as stipulated in Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We have conducted our examination on the basis of the relevant records and documents maintained by the Company and furnished to us for the purpose of review and the information and explanations given to us by the Company during the course of such review.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has in all material respect complied with the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Rathi & Associates Company Secretaries
Sd/- Himanshu Kamdar Partner Date: 23rd April, 2020 M. NO. FCS 5171 Place: Mumbai C.P. No. 3030
86 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
ANNEXURE - A
To, The Board of Directors Hathway Cable and Datacom Limited Rahejas, 4th floor, Corner of Main Avenue, V. P. Road Santacruz (W), Mumbai - 400 054
Dear Sirs,
Re: Certificate pursuant to Clause 10(i) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
Hathway Cable and Datacom Limited (CIN: L64204MH1959PLC011421) (“the Company”) is Public Limited Company incorporated under the provisions of the erstwhile Companies Act, 1956 and whose equity shares are listed on the National Stock Exchange of India Limited (“NSE”) and the BSE Limited (“BSE”), has approached us to issue certificate confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as director of the Company by the Securities and Exchange Board of India (SEBI or Board)/Ministry of Corporate Affairs or any such statutory authority and based on the individual confirmations received from the Board of Directors of the Company who are in their respective office as on 31st March 2020 viz.
Sr. No. Name of the Director DIN 1. Mr. Sridhar Gorthi 00035824 2. Mr. Viren Rajan Raheja 00037592 3. Mr. Akshay Rajan Raheja 00288397 4. Mr. Sasha Gulu Mirchandani 01179921 5. Ms. Ameeta Aziz Parpia 02654277 6. Ms. Geeta Kalyandas Fulwadaya 03341926 7. Mr. Rajan Gupta 07603128 8. Mr. Saurabh Sancheti 08349457 9. Mr. Anuj Jain 08351295 and we certify that:
None of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board /Ministry of Corporate Affairs or any such statutory authority.
This certificate is issued by us only for the purpose of disclosure to be furnished in the Corporate Governance Report of the Company for the financial year ended 31st March, 2020, pursuant to Clause 10(i) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and should not be used for any other purpose.
For Rathi & Associates Company Secretaries
Sd/- Himanshu Kamdar Partner Date: 23rd April, 2020 M. NO. FCS 5171 Place: Mumbai C.P. No. 3030
Hathway Cable and Datacom Limited Annual Report 2019-20 87 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Independent Auditor’s Report To the Members of Hathway Cable and Datacom Limited
Report on Audit of the Standalone Financial our other ethical responsibilities in accordance with these Statements requirements and the Code of Ethics issued by ICAI. We believe that the audit evidence we have obtained is sufficient and Opinion appropriate to provide a basis for our opinion on the standalone We have audited the accompanying standalone financial financial statements. statements of Hathway Cable and Datacom Limited (“the Company”), which comprise the Balance Sheet as at Emphasis of Matter March 31, 2020, the Statement of Profit and Loss (including We draw attention to Note 4.18, in which it is stated that the Other Comprehensive Income), Statement of Changes Board of directors of the Company has approved a Composite in Equity and the Cash Flow Statement for the year then Scheme of Amalgamation and Arrangement involving the ended, and a summary of significant accounting policies and Company, Den Networks Limited (Den), Network18 Media & other explanatory information (hereinafter referred to as “the Investments Limited (Network18), TV18 Broadcast Limited standalone financial statements”). (TV18), Media18 Distribution Services Limited (Cable Co.), Web18 Digital Services Limited (ISP Co.) and Digital18 Media In our opinion and to the best of our information and according Limited (Digital Co.) and their respective shareholders and to the explanations given to us, the aforesaid standalone creditors (“Scheme”). The Scheme provides for amalgamation financial statements give the information required by the of the Company, Den and TV18 with Network 18 and Companies Act, 2013 (“the Act”) in the manner so required and subsequent consolidation of Cable, ISP and Digital businesses give a true and fair view in conformity with the Indian Accounting of the amalgamating companies by way of transfer of relevant Standards prescribed under section 133 of the Act read with undertakings to the respective companies. On amalgamation, the Companies (Indian Accounting Standards) Rules, 2015, as the shareholders of the Company will be issued shares of amended, (“Ind AS”) and other accounting principles generally Network 18. The appointed date of the Scheme is February accepted in India, of the state of affairs of the Company as 1, 2020, however, it will take effect upon receipt of requisite at March 31, 2020, its profit (including other comprehensive approvals and fulfilment of conditions stated in the Scheme. income), its changes in equity and its cash flows for the year Pending the Scheme coming in to force, no effect of the same ended on that date. have been considered in this standalone financial statements of the Company. Our opinion is not modified in respect of Basis for Opinion this matter. We conducted our audit of standalone financial statements in accordance with the Standards on Auditing (SAs) specified Key Audit Matters under section 143(10) of the Act. Our responsibilities under Key audit matters are those matters that, in our professional those Standards are further described in the Auditor’s judgment, were of most significance in our audit of the standalone Responsibilities for the Audit of the Standalone Financial financial statements of the current period. These matters were Statements section of our report. We are independent of the addressed in the context of our audit of the standalone financial Company in accordance with the Code of Ethics issued by statements as a whole, and in forming our opinion thereon, and the Institute of Chartered Accountants of India (ICAI) together we do not provide a separate opinion on these matters. We have with the ethical requirements that are relevant to our audit of determined the matters described below to be the key audit the standalone financial statements under the provisions of matters to be communicated in our report. the Act and the Rules made thereunder, and we have fulfilled
88 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Sr. Key Audit Matters How our audit addressed the Key Audit Matters No 1. Valuation and Disclosure of Deferred Tax Assets Our procedures included, amongst others: The Company has a significant amount of deferred tax We tested management’s assumptions used to determine assets, mainly resulting from unused tax losses and that there is a reasonable certainty that deferred tax unabsorbed depreciation allowance. The accounting for assets recognized in the balance sheet will be realized. deferred tax assets is significant to our audit since the This is based upon forecasted taxable income and the Company makes judgments and estimates of forecasted periods when the deferred tax assets can be utilized. In taxable income in relation to the realization of deferred this regards, we also considered recent changes in the tax assets. As at March 31, 2020, the deferred tax assets Income tax laws and decisions taken by the management are valued at ` 176.62 crores. Further reference is made to pursuant to such changes. The forecasts were evaluated by Note 2.06 us considering especially the performance of the Company post capital infusion, related business plans approved by the management and regulatory changes. Such evaluation included obtaining an understanding of management’s planned strategies around business expansion, revenue stream growth strategies. We have also tested the effectiveness of the Company’s internal controls around the valuation of deferred tax assets. We also assessed the adequacy of the Company’s disclosures included in Note 2.06 2. Impairment of Property, Plant and Equipment Our procedures included, amongst others: There is a risk of impairment on the Company’s property, We assessed the determination of the recoverable amount plant and equipment (PPE) due to the nature of its PPE of the PPE based on our understanding of the nature of and the business environment surrounding the PPE. As on the Company’s business and the economic environment in March 31, 2020, the carrying amount of PPE was ` 771.56 which its PPE operate. crores which represent 13.99% of total assets. We reviewed the Company’s historical performances and The management determines at the end of each reporting held discussions with management to understand their period the existence of any objective evidence that the assessment of the Company’s future performance. This Company’s PPE may be impaired. If there are indicators of included obtaining an understanding of management’s impairment, the deficit between the recoverable amount of planned strategies around business expansion, revenue the PPE and its carrying amount would be recognised as stream growth strategies and cost initiatives. We assessed impairment loss in Statement of Profit and Loss. management’s estimates applied in the value-in-use model The process of identifying indicators of impairment and based on our knowledge of the Company’s operations and determining the recoverable amount of the PPE by compared them against historical forecasts and performance management requires significant judgement and estimation. and tested the mathematical accuracy of the value-in-use The determination of the recoverable amounts requires model. We evaluated the sensitivity of the outcomes by estimates of forecasted revenues, growth rates, profit considering the downside scenarios against changes to margins, tax rates and discount rates. the key assumptions. We also assessed the adequacy of the related disclosures in the notes to the standalone As determined by the management, the carrying amount financial statements of PPE was impaired by ` 42.80 crores in the current year, as disclosed in Note 3.06 to the standalone financial statements.
Hathway Cable and Datacom Limited Annual Report 2019-20 89 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Sr. Key Audit Matters How our audit addressed the Key Audit Matters No 3. Impairment of carrying cost of investments and net Our procedures included, amongst others: receivables from subsidiaries, joint ventures and We have reviewed and considered management’s associates assessment on the net assets or liabilities of these entities. Refer to Notes 1.07, 1.11 and 1.12 for the relevant We have also assessed management’s basis to determine accounting policy and the critical judgements, assumptions potential impairment in both financial and non-financial and estimation uncertainties used in impairment assessment assets of these entities. We also had discussions with of cost of investments in subsidiaries, joint ventures and management on the prospects and future plans of these associates and net receivables due from such entities at entities. We have reviewed the valuation reports of key the reporting year end. Refer to Note 2.03 and 4.13 for the components carried out by the independent valuers and investment in subsidiaries, joint ventures and associates considered the appropriateness of the key assumptions used and amount due from such entities respectively. in the valuation for impairment assessment of investments Total carrying cost of investment in subsidiaries, joint in key components. ventures and associates amounted to ` 1,089.32 crores We have also assessed the adequacy of the disclosures and amount due from subsidiaries, joint ventures and made in the standalone financial statements. associates amounted to ` 81.45 crores. As these balances are significant, they are a key focus area for our audit. For the non-performing subsidiaries, joint ventures and associates or if they have significant negative equity balances, the Company will have exposure to loss on cost of investments and amount due from the subsidiaries, joint ventures and associates. Any impairment losses on the investments in subsidiaries, joint ventures and associates and the related receivables from these entities have to be recognised in the standalone financial statements. Management made a comparison of carrying values of the subsidiaries, joint ventures and associates with the Company’s share of net assets or liabilities of the subsidiaries, joint ventures and associates to identify indications of impairment loss on these investments and receivables due from them. A total exposure of ` 1,170.77 crores was considered. This amount comprised ` 8.80 crores impairment of cost of investment in subsidiaries, joint ventures and associates and ` 59.50 crores impairment of net receivables from subsidiaries, joint ventures and associates. The total impairment loss allowance for the year was ` 68.30 crores
Information Other than the Standalone Financial materially inconsistent with the standalone financial statements Statements and Auditor’s Report Thereon or our knowledge obtained in the audit or otherwise appears to The Company’s Board of Directors is responsible for the be materially misstated. preparation of the other information. The other information comprises the information included in Annual report but does If, based on the work we have performed, we conclude that not include the standalone financial statements and our there is a material misstatement of this other information, we auditor’s report thereon. are required to report that fact. We have nothing to report in this regard. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of Responsibilities of Management and Those assurance conclusion thereon. Charged with Governance for the Standalone Financial Statements In connection with our audit of the standalone financial The Company’s Board of Directors is responsible for the statements, our responsibility is to read the other information matters stated in section 134(5) of the Act with respect to the and, in doing so, consider whether the other information is preparation of these standalone financial statements that give a
90 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
true and fair view of the financial position, financial performance • Obtain an understanding of internal control relevant to (including other comprehensive income), changes in equity the audit in order to design audit procedures that are and cash flows of the Company in accordance with the Ind AS appropriate in the circumstances. Under section 143(3) and other accounting principles generally accepted in India. (i) of the Act, we are also responsible for expressing our This responsibility also includes maintenance of adequate opinion on whether the company has adequate internal accounting records in accordance with the provisions of the Act financial controls system in place and the operating for safeguarding the assets of the Company and for preventing effectiveness of such controls. and detecting frauds and other irregularities; selection • Evaluate the appropriateness of accounting policies and application of appropriate accounting policies; making used and the reasonableness of accounting estimates judgments and estimates that are reasonable and prudent; and and related disclosures made by management. design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring • Conclude on the appropriateness of management’s the accuracy and completeness of the accounting records, use of the going concern basis of accounting and, relevant to the preparation and presentation of the standalone based on the audit evidence obtained, whether financial statements that give a true and fair view and are free a material uncertainty exists related to events or from material misstatement, whether due to fraud or error. conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If In preparing the standalone financial statements, management we conclude that a material uncertainty exists, we is responsible for assessing the Company’s ability to continue are required to draw attention in our auditor’s report as a going concern, disclosing, as applicable, matters related to to the related disclosures in the standalone financial going concern and using the going concern basis of accounting statements or, if such disclosures are inadequate, unless management either intends to liquidate the Company or to modify our opinion. Our conclusions are based to cease operations, or has no realistic alternative but to do so. on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions The Board of Directors are also responsible for overseeing the may cause the Company to cease to continue as a Company’s financial reporting process. going concern. • Evaluate the overall presentation, structure and content Auditor’s Responsibilities for the Audit of the of the standalone financial statements, including the Standalone Financial Statements disclosures, and whether the standalone financial Our objectives are to obtain reasonable assurance about statements represent the underlying transactions and whether the standalone financial statements as a whole are free events in a manner that achieves fair presentation. from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable Materiality is the magnitude of the misstatement in the assurance is a high level of assurance, but is not a guarantee standalone financial statements that, individually or in that an audit conducted in accordance with SAs will always aggregate, makes it probable that the economic decisions of detect a material misstatement when it exists. Misstatements a reasonably knowledgeable user of the standalone financial can arise from fraud or error and are considered material if, statements may be influenced. We consider quantitative individually or in the aggregate, they could reasonably be materiality and qualitative factors in; (i) planning the scope of expected to influence the economic decisions of users taken our audit work and evaluating the results of our work; and (ii) on the basis of these standalone financial statements. to evaluate the effects of any identified misstatements in the standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism We communicate with those charged with governance throughout the audit. We also: regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any • Identify and assess the risks of material misstatement of significant deficiencies in internal control that we identify during the standalone financial statements, whether due to fraud our audit. or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient We also provide those charged with governance with a statement and appropriate to provide a basis for our opinion. The that we have complied with relevant ethical requirements risk of not detecting a material misstatement resulting regading independence, and to communicate with them from fraud is higher than for one resulting from error, as all relationships and other matters that may reasonably be fraud may involve collusion, forgery, intentional omissions, thought to bear on our independence, and where applicable, misrepresentations, or the override of internal control. related safeguards.
Hathway Cable and Datacom Limited Annual Report 2019-20 91 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
From the matters communicated with those charged with taken on record by the Board of Directors, none governance, we determine those matters that were of most of the directors is disqualified as on March 31, significance in the audit of the standalone financial statements 2020 from being appointed as a director in terms of the current period and are therefore the key audit matters. of Section 164(2) of the Act; We describe these matters in our auditor’s report unless law f) With respect to the adequacy of the internal or regulation precludes public disclosure about the matter or financial controls over financial reporting of the when, in extremely rare circumstances, we determine that a Company and the operating effectiveness of such matter should not be communicated in our report because controls, refer to our separate report in “Annexure the adverse consequences of doing so would reasonably B”; be expected to outweigh the public interest benefits of such communication. g) With respect to the other matters to be included in the Auditor’s Report in accordance with the Report on Other Legal and Regulatory requirements of section 197(16) of the Act, as Requirements amended: 1. As required by the Companies (Auditor’s Report) Order, In our opinion and to the best of our information 2016 (“the Order”), issued by the Central Government of and according to the explanations given to us, India in terms of Section 143 (11) of the Act, we give in the remuneration paid by the Company to its the “Annexure A”, a statement on the matters specified directors during the year is in accordance with the in the paragraphs 3 and 4 of the Order. provisions of section 197 of the Act; 2. As required by Section 143 (3) of the Act, we report that: h) With respect to the other matters to be included in a) We have sought and obtained all the information the Auditor’s Report in accordance with Rule 11 of and explanations which to the best of our the Companies (Audit and Auditors) Rules, 2014, knowledge and belief were necessary for the as amended, in our opinion and to the best of our purposes of our audit; information and according to the explanations given to us: b) In our opinion, proper books of account as required by law have been kept by the Company i. The Company has disclosed the impact of so far as it appears from our examination of those pending litigations as at March 31, 2020 books; on its financial position in its standalone financial statements - Refer Note 4.02(g) to c) The Balance Sheet, the Statement of Profit and the standalone financial statements; Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash ii. The Company has made provision, Flow Statement dealt with by this Report are in as required under the applicable law agreement with the relevant books of account; or accounting standards, for material foreseeable losses, if any, on long-term d) In our opinion, the aforesaid standalone financial contracts including derivative contracts statements comply with the Ind AS specified - Refer Note 4.02(f) to the standalone under Section 133 of the Act, read with relevant financial statements; and rules issued thereunder and relevant provisions of the Act; iii. There has been no delay in transferring amounts which were required to be e) On the basis of the written representations transferred to the Investor Education and received from the directors as on March 31, 2020 Protection Fund.
For Nayan Parikh & Co. Chartered Accountants Firm Registration No. 107023W
K.Y. Narayana Partner Place : Mumbai Membership No. 060639 Date : April 23, 2020 UDIN: 20060639AAAADE9418
92 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Annexure A to the Independent Auditor’s Report Referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” of our report on even date to the members of the Company on standalone financial statements for the year ended March 31, 2020:
(i) (a) The Company has maintained proper records (iii) The Company has not granted any loans, secured of Property, Plant and Equipment showing or unsecured to companies, firms, Limited Liability particulars of assets including quantitative Partnerships or other parties covered in the register details and situation except in case of certain maintained under section 189 of the Act. Accordingly, types of distribution equipments like cabling, line paragraph 3(iii)(a), (b) and (c) of the Order are not equipments, access devices with end users. In applicable; view of the management, nature of such assets (iv) Based on the audit procedures applied by us, the and business is such that maintaining location- Company has complied with the terms of the provisions wise particulars is impractical; contained in the section 185 or section 186 of the Act (b) Distribution equipments like cabling and other in respect of investment made during the year under line equipments of selected networks were audit. The Company has not granted loans, guarantees verified. The management plans to verify and made securities, during the year under audit, which balance networks in a phased manner. Property, require compliance in terms of the provisions contained Plant and Equipment, other than distribution in the section 185 or section 186 of the Act. The equipments and access devices with the end management has, based on legal opinion, represented users were physically verified during the year that overdue book debts are not in the nature of loan and based on verification programme adopted by hence do not fall within the scope of section 185 of the the management. As per this programme, all Act. In such circumstances, para 3(iv) of the Order is not assets will be verified at least once in a period of applicable; three years. The management has represented (v) In our opinion and according to the information and that physical verification of access devices with explanation given to us, the Company has not accepted the end users is impractical; however, the same deposits from the public and therefore, the provisions can be tracked, in case of most of the networks, of sections 73 to 76 or any other relevant provisions through subscribers management system; of the Act and the rules framed there under are not The Company is in the process of reconciling book applicable to the Company. We have been informed by records with outcome of physical verification, the management that no order has been passed by the wherever physical verification was carried out and Company Law Board or National Company Law Tribunal have accounted for the discrepancies observed or Reserve Bank of India or any court or any other on such verification; tribunal in this regard; (c) The Company does not hold any immovable (vi) The Central Government has prescribed maintenance properties which are freehold. In respect of of cost records under section 148(1) of the Act, for the immovable properties of land and building that services rendered by the Company. We have broadly have been taken on lease and classified as reviewed the books of account maintained and in our Right of Use Asset in the standalone financial opinion; prima facie, the prescribed accounts and records statements, the lease agreements are in the have been made and maintained by the Company. We name of the Company; have not, however, made a detailed examination of the records with a view to determine whether they are (ii) (a) Inventories have been physically verified during accurate or complete; the year by the management. In our opinion, the (vii) (a) The Company has generally been regular in frequency of verification is reasonable; depositing with appropriate authorities undisputed (b) The discrepancies noticed on physical verification statutory dues such as provident fund, employees’ as compared to the book records were not material state insurance, income tax, sales tax, service tax, having regards to size and nature of operations duty of customs, duty of excise, value added tax, and have been properly dealt with in the books goods and service tax, cess and other applicable of account; statutory dues. According to information and
Hathway Cable and Datacom Limited Annual Report 2019-20 93 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
explanations given to us, no undisputed statutory dues payable were in arrears as at March 31, 2020, for a period of more than six months from the date they became payable; (b) The details of dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax or cess which have not been deposited with the concerned authorities on account of dispute are given below:
Sr. Name of the Statute Nature of the Dues Amount Period to Forum where dispute is No. involved which the pending (` in crores) amount relates 1 Karnataka Value Added Value Added tax 0.57 April 2012 - Deputy Commissioner of Tax Act, 2003 March 2013 Commercial taxes, (Audit) 2 West Bengal Value Entry tax 0.03 April 2015 - Senior Joint Commissioner Added Tax Act, 2003 March 2016 of Sales Tax 3 West Bengal Value Entry tax 0.01 April 2014 - Senior Joint Commissioner Added Tax Act, 2003 March 2015 of Sales Tax 4 West Bengal Value Entry tax 0.05 April 2016 - Senior Joint Commissioner Added Tax Act, 2003 March 2017 of Sales Tax 5 West Bengal Value Value Added Tax and 0.01 April 2016 - Senior Joint Commissioner Added Tax Act, 2003 Central Sales Tax March 2017 of Sales Tax 6 Income tax Act, 1962 Income Tax (Penalty) 0.16 April 2014 - Commissioner of Income March 2015 Tax (Appeals) 7 The Telangana Value Value Added Tax 0.151 April 2015 - Appellate Joint added Tax 2005 March 2016 Commissioner (ST) 8 The Custom Act, 1962 Custom duty 17.902 April 2011 - Customs and Excise and (includes March 2012 Service Tax Appellate penalty ` 8.95) Tribunal (CESTAT)
1Amount paid ` 0.02 crores 2Amount paid ` 0.67 crores
(viii) Based on our audit procedure and according to the (xii) In our opinion and according to information and information and explanations given to us, the Company explanation given to us, the Company is not a Nidhi has not defaulted in repayment of dues to the financial Company. Accordingly, paragraph 3 (xii) of the Order is institutions, banks, and government. The Company has not applicable to the Company; not issued any debentures; (xiii) According to the information and explanations given (ix) In our opinion and according to the information to us and based on our examination of records of the and explanations given to us and based on overall Company, the Company is in compliance with the examination of records, the term loans have been applied provisions of section 177 and 188 of the Act, where for the purpose for which the loans were obtained. The applicable, for transactions with the related parties and Company did not raise any money by way of initial public the details of the related party transactions have been offer or further public offer (including debt instruments); disclosed in the standalone financial statements as required by the applicable accounting standards. (x) To the best of our knowledge and belief and according to the information and explanations given to us, no material (xiv) The Company has not made any preferential allotment fraud by the Company or on the Company by its officers or private placement of shares or fully or partly or employees has been noticed or reported during the convertible debentures during the current financial year. year; However, during the previous financial year 2018-19, the Company had made preferential allotment of shares and (xi) According to the information and explanations given to the requirement of section 42 of the Act, as applicable, us and based on our examination of the records of the had been complied with. According to the information Company, the Company has paid/provided for managerial and explainations given by the management, out of the remuneration in accordance with the requisite approvals funds so raised, ` 99.64 crores have been utilized for the mandated by the provisions of section 197, read with purposes for which those were raised and balance funds Schedule V to the Act;
94 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
to the extent of ` 2940 crores pending such utilization, connected with them covered under section 192 of the have been temporarily invested in Fixed Deposits with Act. We have been informed that no such transactions Banks; have been entered into with person connected with directors. Accordingly, paragraph 3(xv) of the Order is (xv) Based on our audit procedures performed for the purpose not applicable to the Company; and of reporting the true and fair view of the standalone financial statements, the Company has not entered into (xvi) The Company is not required to be registered under any non-cash transactions with directors or persons section 45-IA of the Reserve Bank of India Act, 1934.
For Nayan Parikh & Co. Chartered Accountants Firm Registration No. 107023W
K.Y. Narayana Partner Place : Mumbai Membership No. 060639 Date : April 23, 2020 UDIN: 20060639AAAADE9418
Hathway Cable and Datacom Limited Annual Report 2019-20 95 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Annexure B to the Independent Auditor’s Report Referred to in paragraph 2(f) under “Report on Other Legal and Regulatory Requirements” of our report on even date to the members of the Company on standalone financial statements for the year ended March 31, 2020
Opinion financial controls with reference to financial statements was We have audited the internal financial controls with reference established and maintained and if such controls operated to financial statements of the Company as of March 31, effectively in all material respects. 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls In our opinion, the Company has, in all material respects, an system with reference to financial statements and their adequate internal financial controls system with reference to operating effectiveness. Our audit of internal financial controls financial statements and such internal financial controls with with reference to financial statements included obtaining an reference to financial statements were operating effectively as understanding of internal financial controls with reference at March 31, 2020 based on the internal controls with reference to financial statements, assessing the risk that a material to financial statements criteria established by the Company weakness exists, and testing and evaluating the design considering the essential components of internal controls and operating effectiveness of internal control based on the stated in the Guidance Note. assessed risk.
Management’s Responsibility for Internal Financial The procedures selected depend on the auditor’s judgment, Controls including the assessment of the risks of material misstatement The Company’s management is responsible for establishing of the standalone financial statements, whether due to fraud and maintaining internal financial controls based on the or error. internal controls with reference to financial statements criteria established by the Company considering the essential We believe that the audit evidence we have obtained is sufficient components of internal control stated in the Guidance Note on and appropriate to provide a basis for our audit opinion on the Audit of Internal Financial Controls over Financial Reporting Company’s internal financial controls system with reference to (‘Guidance Note’) issued by the ICAI. These responsibilities financial statements. include the design, implementation and maintenance of adequate internal financial controls that were operating Meaning of Internal Financial Controls with effectively for ensuring the orderly and efficient conduct of reference to Financial Statements its business, including adherence to Company’s policies, A company’s internal financial controls with reference the safeguarding of its assets, the prevention and detection to financial statements is a process designed to provide of frauds and errors, the accuracy and completeness of the reasonable assurance regarding the reliability of financial accounting records, and the timely preparation of reliable reporting and the preparation of standalone financial financial information, as required under the Act. statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial Auditor’s Responsibility controls with reference to financial statements includes those Our responsibility is to express an opinion on the Company’s policies and procedures that (1) pertain to the maintenance internal financial controls with reference to financial statements of records that, in reasonable detail, accurately and fairly based on our audit. We conducted our audit in accordance with reflect the transactions and dispositions of the assets ofthe the Guidance Note and the Standards on Auditing specified Company; (2) provide reasonable assurance that transactions under section 143(10) of the Act, to the extent applicable to an are recorded as necessary to permit preparation of standalone audit of internal financial controls, both issued by ICAI. Those financial statements in accordance with generally accepted Standards and the Guidance Note require that we comply accounting principles and that receipts and expenditures with ethical requirements and plan and perform the audit to of the Company are being made only in accordance with obtain reasonable assurance about whether adequate internal authorizations of management and directors of the Company;
96 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
and (3) provide reasonable assurance regarding prevention or of collusion or improper management override of controls, timely detection of unauthorized acquisition, use, or disposition material misstatements due to error or fraud may occur and not of the Company’s assets that could have a material effect on be detected. Also, projections of any evaluation of the internal the standalone financial statements. financial controls with reference to financial statements to future periods are subject to the risk that the internal financial Inherent Limitations of Internal Financial Controls controls with reference to financial statements may become with reference to Financial Statements inadequate because of changes in conditions, or that the Because of the inherent limitations of internal financial controls degree of compliance with the policies or procedures may with reference to financial statements, including the possibility deteriorate.
For Nayan Parikh & Co. Chartered Accountants Firm Registration No. 107023W
K.Y. Narayana Partner Place : Mumbai Membership No. 060639 Date : April 23, 2020 UDIN: 20060639AAAADE9418
Hathway Cable and Datacom Limited Annual Report 2019-20 97 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Standalone Balance Sheet AS AT MARCH 31, 2020 (` in Crores unless otherwise stated) Particulars Note As at As at No. March 31, 2020 March 31, 2019 ASSETS Non-current assets Property, Plant and Equipment 2.01 771.56 751.75 Capital work in progress 26.61 51.56 Other Intangible assets 2.02 74.16 51.98 Financial Assets Investments 2.03 1,083.74 1,083.73 Loans 2.04 7.69 23.91 Other financial assets 2.05 4.36 13.03 Deferred tax assets (net) 2.06 176.62 267.67 Other Non-current assets 2.07 46.91 43.95 Total Non-current assets 2,191.65 2,287.58 Current assets Inventories 2.08 11.79 12.98 Financial Assets Investments 2.09 27.72 2,993.56 Trade receivables 2.10 0.21 6.50 Cash and cash equivalents 2.11 1,050.34 53.12 Bank balances other than Cash and cash equivalents 2.12 2,000.14 50.00 Loans 2.04 26.02 80.25 Other financial assets 2.05 132.19 1.98 Current Tax Assets (Net) 2.13 42.59 42.54 Other current assets 2.07 34.10 29.61 Total Current assets 3,325.10 3,270.54 Total Assets 5,516.75 5,558.12 EQUITY AND LIABILITIES Equity Equity Share capital 2.14 354.02 354.02 Other Equity 2.15 3,964.70 3,948.03 Total Equity 4,318.72 4,302.05 Liabilities Non-current Liabilities Financial Liabilities Borrowings 2.16 43.99 800.18 Other financial liabilities 2.17 12.05 9.63 Provisions 2.18 2.18 2.78 Other Non-current liabilities 2.19 2.12 3.38 Total Non-current liabilities 60.34 815.97 Current liabilities Financial Liabilities Borrowings 2.16 908.58 2.40 Trade payables Total outstanding dues of: - Micro & small enterprises - - - Other 44.28 44.40 Other financial liabilities Total outstanding dues of: - Micro & small enterprises 2.17 0.25 - - Other 2.17 79.06 308.49 Other current liabilities 2.19 105.35 84.51 Provisions 2.18 0.17 0.30 Total current liabilities 1,137.69 440.10 Total Equity and Liabilities 5,516.75 5,558.12 Summary of Significant Accounting Policies 1 Refer accompanying notes. These notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
98 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Standalone Statement of Profit and Loss FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) Particulars Note Year ended Year ended No. March 31, 2020 March 31, 2019
INCOME Revenue from Operations 3.01 567.69 527.63 Other Income 3.02 250.34 54.86 818.03 582.49 EXPENDITURE Operational Expenses 3.03 180.30 122.54 Employee Benefits Expense 3.04 56.81 49.84 Finance Cost 3.05 116.10 102.58 Depreciation, Amortization and Impairment 3.06 152.19 115.92 Other Expenses 3.07 198.93 164.14 704.33 555.02 Profit before Exceptional items and Tax 113.70 27.47 Exceptional Items 3.08 6.01 84.54 Profit / (Loss) before Tax 107.69 (57.07) Tax Expense: Current Tax - - Deferred Tax 2.06 91.05 (267.67) Profit for the Year (A) 16.64 210.60 Other Comprehensive Income / (Loss) (Net of Taxes) Items that will not be reclassified to profit or loss Remeasurements of the post employment benefit obligations 0.04 (0.22) Net gain on financial assets measured at FVTOCI - 1.07 Other Comprehensive Income for the year (B) 0.04 0.85 Total Comprehensive Income for the year (A+B) 16.68 211.45 Earnings per equity share (Face value of ` 2/- each) (Refer Note 4.01): Basic and diluted (in ` ) 0.09 2.08 Summary of Significant Accounting Policies 1
Refer accompanying notes. These notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
Hathway Cable and Datacom Limited Annual Report 2019-20 99 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Standalone Statement of Changes in Equity FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) A. Equity Share Capital Particulars Note No. Amount Balance at April 01, 2018 2.14 166.10 Changes in Equity Share Capital during the year 187.92 Balance at March 31, 2019 2.14 354.02 Changes in Equity Share Capital during the year - Balance at March 31, 2020 2.14 354.02
B. Other Equity Particulars Reserves and Surplus Total Securities Retained Premium earnings Balance at April 01, 2018 1,877.01 (989.21) 887.80 Profit for the year - 210.60 210.60 Other Comprehensive Income for the year - 0.85 0.85 Addition during the year (Net of Share Issue 2,848.78 - 2,848.78 Expenses amounting to ` 2.94 adjusted against Securities Premium) Balance at March 31, 2019 4,725.79 (777.76) 3,948.03 Impact on account of adoption of Ind AS 116 - (0.01) (0.01) (Refer Note no 1.19) Profit for the year - 16.64 16.64 Other Comprehensive Income for the year - 0.04 0.04 Balance at March 31, 2020 4,725.79 (761.09) 3,964.70
Summary of Significant Accounting Policies (Refer Note 1) Refer accompanying notes. These notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
100 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Standalone Statement of Cash Flows FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Cash flow from operating activities Profit / (Loss) before Tax 107.69 (57.07) Depreciation, Amortization and Impairment 152.19 115.92 Amount no longer payable written back (0.14) (0.02) Impairment of trade receivables 3.03 2.40 Impairment of Advance 2.00 0.04 Provision for leave encashment and gratuity (1.39) 0.71 Share of loss from LLP 0.14 0.20 Net Sundry Advances Written Off 0.09 - Foreign Exchange Fluctuation 3.29 (1.48) MTM (gain) / loss on swap - 0.04 Loss on disposal of Property, Plant and Equipment 5.98 4.49 Net gain on financial assets measured at fair value through profit and loss (0.27) (41.59) (Gain) / Loss on sale of current investments (50.40) - Unwinding of Interest & Financial Guarantees - (2.17) Income from Fixed Deposit / Loans (192.02) (6.72) Dividend Income from associate (4.20) (4.20) Interest and finance charges 116.10 102.58 Exceptional Items (Refer Note 4.05) 6.01 84.54 148.10 197.67 Change in operating assets and liabilities : Decrease/(increase) in trade receivables 2.57 (2.90) Decrease/(increase) in inventories 1.20 2.66 Increase/(decrease) in trade payables (0.12) (2.87) Decrease/(increase) in other financial assets 2.15 4.09 Decrease/(increase) in other non-current assets (5.58) (4.77) Decrease/(increase) in other current assets (4.48) 10.27 Increase/(decrease) in provisions (0.57) 0.01 Increase/(decrease) in other current liabilities 20.84 (4.26) Increase/(decrease) in other financial liabilities (7.47) (8.13) Cash generated from operations 156.64 191.77 Less/(Add): Income taxes paid (net of refunds) 4.82 2.70 Net cash flow from / (used in) operating activities (A) 151.82 189.07 Cash flow from investing activities Payments for acquisition of Property, Plant and Equipment (231.17) (200.02) Proceeds from sale of Property, Plant and Equipment 0.36 0.18 Loans & advances given to related parties & Others (Net) 68.79 (21.19) Investment in related parties (0.70) 0.02 Payment for purchase of investments-Mutual Funds (741.92) (7,640.41) Proceeds from sale of investments-Mutual Funds/others 3,758.43 4,688.44 Invested in fixed deposits (2,600.71) (50.40) Fixed Deposit redeemed during the year 659.23 0.40 Income from Fixed Deposit / Loans 61.77 5.52 Dividend from Associate received 4.20 4.20 Net cash flow from / (used in) investing activities (B) 978.28 (3,213.26) Cash flows from financing activities Proceeds from Issue of Equity Shares / share application money - 3,039.64 Expenses relating to equity infusion - (25.87) Share issue expenses paid - (2.94) Proceeds from Non - current Borrowings - 528.58 Repayments of Non - current Borrowings (928.17) (335.72)
Hathway Cable and Datacom Limited Annual Report 2019-20 101 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Standalone Statement of Cash Flows FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Proceeds/(Repayments) from current borrowings (net) 897.59 (22.47) Interest and finance charges (110.89) (102.81) Net cash flow from / (used in) in financing activities (C) (141.47) 3,078.41 Net Increase / (decrease) in cash and cash equivalents (A+B+C) 988.63 54.22 Cash and cash equivalents at the beginning of the year 53.12 4.47 Bank overdrafts at the beginning of the year - (5.57) Cash and cash equivalents at the end of the year 1,041.75 53.12 Reconciliation of cash and cash equivalents as per the cash flow statement : Cash and cash equivalents Balances with banks: On current accounts 4.23 22.14 Cheques/drafts on Hand 0.12 - Deposits with banks with original maturity of 3 months or less 1,045.78 30.11 Cash on hand 0.21 0.87 Bank overdrafts (8.59) - Balance as per the cash flow statement 1,041.75 53.12
Note : 1) Above statement has been prepared by using Indirect method as per Ind AS 7 on Statement of Cash flows. 2) Changes in liabilities arising from financing activities :
Particulars As at Net Cash Non cash changes As at March 31, 2019 Flows Foreign Exchange Fair value March 31, 2020 movement (Gain) / Loss changes Non - current Borrowings 981.79 (928.17) - 7.92 61.54 (including current maturities of Non-current Borrowings) Current Borrowings 2.40 897.59 - - 899.99 Total liabilities from financing 984.19 (30.58) - 7.92 961.53 activities
Particulars As at Net Cash Non cash changes As at March 31, 2018 Flows Foreign Exchange Fair value March 31, 2019 movement (Gain) / Loss changes Non - current Borrowings 789.01 192.86 - 0.08 981.79 (including current maturities of Non-current Borrowings) Current Borrowings 24.87 (22.47) - - 2.40 Total liabilities from financing 813.88 170.39 - 0.08 984.19 activities
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
BACKGROUND Hathway Cable and Datacom Limited (“the Company”) is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in distribution of internet services through cable and has strategic stake in entities engaged in Cable Television business. Its equity shares are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) in India.
Authorisation of standalone financial statements The standalone financial statements were authorized for issue in accordance with a resolution of the Board of directors on April 23, 2020.
1.00 SIGNIFICANT ACCOUNTING POLICIES This note provides a list of the significant accounting policies adopted in the presentation of these standalone financial statements.
1.01 BASIS OF PREPARATION (i) Compliance with Ind AS The standalone financial statements comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”), and relevant rules issued thereunder andrelevant provisions of the Act. In accordance with proviso to the Rule 4A of the Companies (Accounts) Rules, 2014, the terms used in these financial statements are in accordance with the definitions and other requirements specified in the applicable Accounting standards.
(ii) Historical Cost Convention The standalone financial statements have been prepared on a historical cost basis, except for the following: • Certain financial assets and liabilities (including derivative instruments) is measured at fair value; and • Defined benefit plans – plan assets measured at fair value • Right of Use assets
1.02 ROUNDING OF AMOUNTS All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest crores, except where otherwise indicated.
1.03 CURRENT VERSUS NON-CURRENT CLASSIFICATION The Company presents its assets and liabilities in the balance sheet based on current / non-current classification. An asset is classified as current if: (i) it is expected to be realised or intended to be sold or consumed in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is expected to be realised within twelve months after the reporting period; or (iv) the cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is classified as current if:
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
(i) it is expected to be settled in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is due to be settled within twelve months after the reporting period; or (iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities on net basis.
All assets and liabilities have been classified as current or non-current as per Company’s normal operating cycle. Based on the nature of operations, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
1.04 USE OF JUDGEMENTS, ESTIMATES & ASSUMPTIONS While preparing standalone financial statements in conformity with Ind AS, the management makes certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecasted and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. The management continually evaluates these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments inapplying accounting policies that have the most significant effect on the amounts recognized in the standalone financial statements are as below:
Key assumptions (i) Financial instruments; (Refer note 4.11) (ii) Useful lives of Property, Plant and Equipment and Intangible Assets; (Refer note 1.05 and 1.06) (iii) Assets and obligations relating to employee benefits; (Refer note 4.06) (iv) Evaluation of recoverability of deferred tax assets; (Refer note 2.06) and (v) Contingencies (Refer note 4.02).
1.05 PROPERTY, PLANT AND EQUIPMENT Property, Plant and Equipment acquired separately
(i) Property, Plant and Equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price, non-refundable taxes, any costs directly attributable to bringing the asset into the location and conditions necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, finance cost. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. (ii) Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost
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of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred.
(iii) Access devices on hand at the year-end are included in Capital Work in Progress. On installation, such devices are capitalized or treated as sale, as the case may be.
(iv) The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and changes, if any, are accounted prospectively.
(v) Stores & Spares which meet the definition of Property, Plant and Equipment and satisfy the recognition criteria of Ind AS 16 are capitalized as Property, Plant and Equipment.
Derecognition of Property, Plant and Equipment (vi) An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of an item of Property, Plant and Equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
Depreciation on Property, Plant and Equipment (vii) Depreciation on Property, Plant and Equipment is provided on straight line method. In accordance with requirements prescribed under Schedule II of Companies Act, 2013, the Company has assessed the estimated useful lives of its Property, Plant and Equipment and has adopted the useful lives and residual value as prescribed in Schedule II except for the cost of Access devices at the customer’s location which are depreciated on straight-line method over a period of eight years based on internal technical assessment.
(viii) In case of additions or deletions during the year, depreciation is computed from the month in which such assets are put to use and up to previous month of sale, disposal or held for sale as the case may be. In case of impairment, depreciation is provided on the revised carrying amount over its remaining useful life.
(ix) All assets costing up to ` 5,000/- are fully depreciated in the year of capitalisation.
Deemed cost for Property, Plant and Equipment The Company had elected to continue with the carrying value of all of its Property, Plant and Equipment recognised as of the date of transition to Ind AS measured as per the previous GAAP and use that carrying value as it’s deemed cost as of the transition date.
1.06 INTANGIBLE ASSETS Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Intangible Assets acquired separately Intangible assets comprises of Network Franchisee, Bandwidth Rights, Goodwill, Customer Acquisition Cost and Softwares.
Intangible assets with finite useful lives that are acquired are recognized only if they are separately identifiable and the Company expects to receive future economic benefits arising out of them. Such assets are stated at cost less accumulated amortization and impairment losses. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less impairment losses.
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
Intangible Assets acquired in business combination Intangible Assets acquired in business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Derecognition of intangible assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in statement of profit and loss when the asset is derecognised.
Amortisation of intangible assets Intangible assets with finite useful lives are amortised on a straight line basis over their useful economic lives and assessed for impairment whenever there is indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each year end. The amortisation expense on Intangible assets with finite lives and impairment loss is recognised in the Statement of Profit and Loss.
Estimated lives for current and comparative periods in relation to application of straight line method of amortisation of intangible assets (acquired) are as follows: • Network Franchisee are amortised over the period of five to twenty years. • Softwares are amortised over the license period and in absence of such tenor, over five years. • Bandwidth Rights are amortised over the period of the underlying agreements. • Customer acquisition costs are amortised over the period of five years. The estimated useful lives, residual values, amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Deemed cost for Intangible assets The Company had elected to continue with the carrying value of all of its Intangible assets recognised as of the date of transition to Ind AS measured as per the previous GAAP and use that carrying value as it’s deemed cost as of the transition date.
1.07 IMPAIRMENT OF ASSETS Carrying amount of Tangible assets, Intangible assets, Investments in Subsidiaries, Joint Ventures and Associates (which are carried at cost) are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or Company’s assets (cash-generating units). Non- financial assets other than goodwill that suffered an impairment are reviewed for possible reversal ofthe impairment at the end of each reporting period.
1.08 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Non-current assets are classified as held for sale if their carrying amount will be recovered principally through asale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.
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An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale.
Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet.
A discontinued operation is a component of the entity that has been disposed off or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit and loss.
1.09 INVENTORIES Inventories are valued as follows: Spares and maintenance items are valued at lower of cost (net of taxes recoverable) on first in first out basis or net realizable value.
Stock-in-trade comprising of access devices are valued at cost on weighted average method or at net realizable value, whichever is lower.
1.10 CASH AND CASH EQUIVALENTS Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
For the purpose of statement of cash flows, cash and cash equivalents consist of cash, short-term deposits as defined above, bank overdrafts and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value as they are considered as an integral part of the Company’s management. Bank overdrafts are shown within borrowings under current liabilities in the balance sheet.
1.11 FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments.
Initial Recognition and Measurement – Financial Assets and Financial Liabilities Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
Classification and Subsequent Measurement: Financial Assets The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (“FVTOCI”) or fair value through profit or loss (“FVTPL”) on the basis of following: - the entity’s business model for managing the financial assets; and - the contractual cash flow characteristics of the financial asset.
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
Amortised Cost: A financial asset is classified and measured at amortised cost if both of the following conditions are met: - the financial asset is held within a business model whose objective is to hold financial assets in ordertocollect contractual cash flows; and - the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
FVTOCI: A financial asset is classified and measured at FVTOCI if both of the following conditions are met:
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and - the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
FVTPL: A financial asset is classified and measured at FVTPL unless it is measured at amortised cost or at FVTOCI.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Impairment of Financial Assets The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Classification and Subsequent measurement: Financial Liabilities The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Financial Liabilities at FVTPL: Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL.
Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.
Other Financial Liabilities: Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of Financial Assets and Financial Liabilities: The Company de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards
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of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Offsetting Financial Instruments: Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is alegally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realisethe asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
1.12 INVESTMENT IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES A subsidiary is an entity that is controlled by another entity. An investor controls an investee if and only if the investor has the following; (i) Power over the investee, (ii) exposure, or rights, to variable returns from its involvement with the investee and (iii) the ability to use its power over the investee to affect the amount of the investor’s returns. An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Company’s investments in its subsidiaries, associates and joint ventures are accounted at cost and reviewed for impairment at each reporting date in accordance with the policy described in note 1.07 above.
1.13 BORROWING COSTS Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.14 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a current pre- tax rate. The increase in the provision due to the passage of time is recognised as interest expense. Contingent liabilities are disclosed in the case of: • a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation; • a present obligation arising from the past events, when no reliable estimate is possible; • a possible obligation arising from past events, unless the probability of outflow of resources is remote.
Contingent Assets is disclosed when inflow of economic benefits is probable.
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
1.15 GRATUITY AND OTHER POST-EMPLOYMENT BENEFITS (i) Short-term obligations Short term employee benefits are recognised as an expense at an undiscounted amount in the Statement of Profit and Loss of the year in which the related services are rendered.
(ii) post-employment obligations The Company operates the following post-employment schemes: • defined benefit plans such as gratuity; and • defined contribution plans such as provident fund
Gratuity obligations The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflowsby reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised at amount net of taxes in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in Statement of Profit and Loss as past service cost.
Defined contribution plans The Company pays provident fund contributions to publicly administered provident funds. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
(iii) Other long-term employee benefit obligations The liabilities for leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that haveterms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in Statement of Profit and Loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
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(iv) Bonus Plans The Company recognises a liability and an expense for bonuses. The Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
1.16 REVENUE RECOGNITION (i) Income from rendering of services and sale of products The Company derives revenues primarily from Broadband business comprising of Internet services and other allied services. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expect to receive in exchange for those products or services. Subscription revenue is recognized ratably over the period in which the services are rendered. To recognize revenues, the Company applies the following five step approach: 1. identify the contract with a customer; 2. identify the performance obligations in the contract; 3. determine the transaction price; 4. allocate the transaction price to the performance obligations in the contract; and 5. recognize revenues when a performance obligation is satisfied Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. A receivable is a right to consideration that is unconditional upon passage of time. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset for these cases as right to consideration is unconditional upon passage of time. While invoicing in excess of revenue are classified as contract liabilities (which we refer to as unearned revenue). The Company presents revenues net of indirect taxes in its Statement of Profit and Loss.
(ii) Other Operating Income Other Operating Income comprises of fees for rendering management, technical and consultancy services. Income from such services is recognized upon satisfaction of performance obligation as per the terms of underlying agreements.
(iii) Interest Income Interest income from debt instruments is recognised using the effective interest rate method.
(iv) Dividend Income Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
(v) Share of profit / loss from Partnership firms Share of profit / loss from Partnership firm is recognised in the Statement of Profit and Loss in respect of the financial year of the Partnership firm ending on or before the balance sheet date, on the basis of its audited accounts.
1.17 TAXES ON INCOME Current Tax: Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
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Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax: Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the Statement of Profit and Loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company have a legally enforceable right to set-off assets against liabilities.
1.18 EARNINGS PER SHARE (EPS) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing cost associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.19 LEASES Effective April 1, 2019, the Company has adopted Ind AS 116 “Leases” using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as on April 1, 2019. Accordingly, the comparative information has not been restated and continues to be reported under Ind AS 17 “Lease”. Additionally, the disclosure requirements in Ind AS 116 have not generally been applied to comparative information. The following is the summary of the new and/or revised significant accounting policies related to Leases. Refer Note 1 “Significant Accounting policies”, in the Company’s 2019 Annual Report for the policies in effect for Leases prior to April 1, 2019. The effect of transition on Ind AS 116 was insignificant.
As a lessee The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.
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The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight- line basis over the lease term.
As a lessor A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. Lease income from operating leases where the Company is a lessor are recognized on either a straight-line basis or another systematic basis. The Company shall apply another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. The Company present underlying assets subject to operating leases in its balance sheet according to the nature of the underlying asset.
1.20 FOREIGN CURRENCY TRANSLATIONS (i) Functional and presentation currency The Company’s standalone financial statements are prepared in INR, which is also the Company’s functional and presentation currency.
(ii) transactions and balances Monetary items:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in statement of profit and loss. Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other gains / (losses).
Non – Monetary items:
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
1.21 FINANCIAL GUARANTEE CONTRACT The Company on case to case basis elects to account for financial guarantee contracts as financial instruments oras an insurance contract, as specified in Ind AS 109 on Financial Instruments and Ind AS 104 on Insurance Contracts. The Company has regarded its financial guarantee contracts as insurance contracts on contract by contract basis. At the end of each reporting period the Company performs liability adequacy test, (i.e. it assesses the likelihood of a pay-out based on current undiscounted estimates of future cash flows) on financial guarantee contracts regarded as insurance contracts, and the deficiency is recognized in the Statement of Profit and Loss.
Hathway Cable and Datacom Limited Annual Report 2019-20 113 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020
1.22 BUSINESS COMBINATIONS AND GOODWILL Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Company elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs which are administrative in nature are expensed out.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash- generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed off, the goodwill associated with the operation disposed off is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed off in this circumstance is measured based on the relative values of the operation disposed off and the portion of the cash-generating unit retained.
Common control business combinations include transactions, such as transfer of subsidiaries or businesses, between entities within a group.
Business combinations involving entities or businesses under common control are accounted for using the pooling of interests method. Under pooling of interest method, the assets and liabilities of the combining entities are reflected at their carrying amounts, the only adjustments that are made are to harmonise accounting policies.
The financial information in the standalone financial statements in respect of prior periods are restated as if the business combination had occurred from the beginning of the preceding period in the standalone financial statements, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information is restated only from that date.
The difference, if any, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and presented separately from other capital reserves with disclosure of its nature and purpose in the notes.
114 Hathway Cable and Datacom Limited Annual Report 2019-20 Notes to the Standalone Financial Statements CORPORATE GOVERNANCE FOR THE YEAR ENDED MARCH 31, 2020
2.01 Property, Plant and Equipment: (` in Crores unless otherwise stated) REPORT ON Particulars Gross Carrying Amount Accumulated Depreciation / Impairment Net Carrying Amount As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2019 March 31, 2020 April 1, 2019 Year on disposal March 31, 2020 March 31, 2020 March 31, 2019 Own Assets: Plant and Equipment 993.83 156.76 14.57 1,136.02 258.44 130.81 9.63 379.62 756.40 735.39 Air conditioners 4.18 0.48 0.03 4.63 2.18 0.74 0.02 2.90 1.73 2.00 Structural fittings 2.72 - - 2.72 0.97 0.27 - 1.24 1.48 1.75 Furniture & Fixtures 11.08 0.15 - 11.23 4.59 1.05 - 5.64 5.59 6.49
Mobile & Telephone 0.59 0.03 - 0.62 0.37 0.08 - 0.45 0.17 0.22 FINANCIAL STATEMENTS Computers 7.17 1.23 0.01 8.39 5.48 0.84 0.01 6.31 2.08 1.69 Office Equipments 2.57 0.32 - 2.89 1.79 0.39 - 2.18 0.71 0.78 STANDALONE Electrical Fittings 4.88 0.22 - 5.10 1.81 0.46 - 2.27 2.83 3.07 Motor Vehicles 0.63 - - 0.63 0.27 0.06 - 0.33 0.30 0.36 Total (A) 1,027.65 159.19 14.61 1,172.23 275.90 134.70 9.66 400.94 771.29 751.75 Right of Use assets: Building - 0.65 - 0.65 - 0.38 - 0.38 0.27 - Total (B) - 0.65 - 0.65 - 0.38 - 0.38 0.27 - Hathway CableandDatacom Limited Total (A+B) 1,027.65 159.84 14.61 1,172.88 275.90 135.08 9.66 401.32 771.56 751.75
Particulars Gross Carrying Amount Accumulated Amortisation / Impairment Net Carrying Amount FINANCIAL STATEMENTS As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2018 March 31, 2019 April 1, 2018 Year on disposal March 31, 2019 March 31, 2019 March 31, 2018 CONSOLIDATED Own Assets: Plant and Equipment 883.84 125.23 15.24 993.83 161.97 102.03 5.56 258.44 735.39 721.87 Air conditioners 3.79 0.39 * 4.18 1.43 0.75 * 2.18 2.00 2.36 Structural fittings 2.48 0.24 - 2.72 0.63 0.34 - 0.97 1.75 1.85 Furniture & Fixtures 10.71 0.37 - 11.08 3.39 1.20 - 4.59 6.49 7.32 Mobile & Telephone 0.56 0.03 - 0.59 0.29 0.08 - 0.37 0.22 0.27 Computers 6.48 0.69 * 7.17 4.21 1.27 * 5.48 1.69 2.27 Office Equipments 2.40 0.17 - 2.57 1.28 0.51 - 1.79 0.78 1.12 Annual Report 2019-20 Electrical Fittings 4.46 0.42 * 4.88 1.22 0.59 * 1.81 3.07 3.24 Motor Vehicles 0.63 - - 0.63 0.19 0.08 - 0.27 0.36 0.43 Total 915.35 127.54 15.24 1,027.65 174.61 106.85 5.56 275.90 751.75 740.75 * Amount less than ` 50,000/- Notes : 1 Loss of ` Nil (March 31, 2019: ` 1.33) arising on account of exchange difference on long-term foreign currency borrowings, utilised for purchase of Property, Plant and Equipment has been capitalised and included in “Additions”. The Company has also capitalised Finance cost of ` Nil (March 31, 2019: ` .1.26) 2 Depreciation charge for the year includes Impairment of Plant and Equipment ` 42.80 (March 31, 2019: ` 12.84).
115 3 Refer note no 4.04 for disclosure of contractual commitments for acquisition of Property, Plant and Equipment. 116
Hathway CableandDatacom Limited Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 CORPORATE OVERVIEW
2.02 Intangible Assets : (` in Crores unless otherwise stated) Particulars Gross Carrying Amount Accumulated Amortisation / Impairment Net Carrying Amount As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2019 March 31, 2020 April 1, 2019 Year on disposal March 31, 2020 March 31, 2020 March 31, 2019 Goodwill 0.11 - - 0.11 0.11 - - 0.11 - - Network Franchisee 6.05 - - 6.05 2.15 0.65 - 2.80 3.25 3.90 Softwares 27.42 2.34 - 29.76 13.28 4.77 - 18.05 11.71 14.14 Bandwidth Rights 2.12 - - 2.12 0.97 0.32 - 1.29 0.83 1.15 Customer Acquisition 36.96 36.94 - 73.90 4.17 11.36 - 15.53 58.37 32.79 Cost Total 72.66 39.28 - 111.94 20.68 17.10 - 37.78 74.16 51.98 Annual Report 2019-20 * Amount less than ` 50,000/- NOTICE
Particulars Gross Carrying Amount Accumulated Amortisation / Impairment Net Carrying Amount As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2018 March 31, 2019 April 1, 2018 Year on disposal March 31, 2019 March 31, 2019 March 31, 2018 Goodwill 0.11 - - 0.11 0.11 - - 0.11 - - Network Franchisee 6.05 * - 6.05 1.72 0.43 - 2.15 3.90 4.33 Softwares 21.74 5.68 - 27.42 9.12 4.16 - 13.28 14.14 12.62 Bandwidth Rights 2.12 - - 2.12 0.66 0.31 - 0.97 1.15 1.46 Customer Acquisition - 36.96 - 36.96 - 4.17 - 4.17 32.79 - Cost DIRECTORS’ REPORT Total 30.02 42.64 - 72.66 11.62 9.08 - 20.68 51.98 18.41 Notes : 1 Amortisation charge for the year includes Impairment of Network Franchisee ` 0.22 (March 31, 2019: ` Nil ) 2 Range of remaining period of amortisation as at March 31, 2020 of Intangible assets is as below :
0 to 5 years 6 to 10 years 10 to 15 years Total Network Franchisee 2.04 1.21 * 3.25 Softwares 11.71 - - 11.71 Customer Acquisition Cost 58.37 - - 58.37 MANAGEMENT DISCUSSION Bandwidth Rights 0.74 0.07 0.02 0.83
Total 72.86 1.28 0.02 74.16 and
3 Refer note no 2.16 (c) for information on Property, Plant and Equipment pledged as security of the group. ANALYSIS
REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) 2.03 Non-Current Investments Particulars Face March 31, 2020 March 31, 2019 Value Quantity Amount Quantity Amount Per Share ` Investments (measured at cost) Investment in Subsidiaries, Joint Ventures and Associates Quoted (fully paid up) Investment in Equity Shares of Subsidiary Hathway Bhawani Cabletel & Datacom Ltd. 10 2,020,000 2.39 2,020,000 2.39 Less: Impairment in value of investment 0.60 0.60 Investment in Equity Shares of Associate GTPL Hathway Ltd. (f.k.a. GTPL Hathway Pvt. 10 41,972,694 568.55 41,972,694 568.55 Ltd.) 570.34 570.34 unquoted (fully paid up) Investment in Equity Shares of Subsidiaries Hathway Digital Pvt. Ltd. 10 355,734,833 432.67 355,734,833 432.67 Hathway Krishna Cables Pvt. Ltd. 10 7,808,333 15.41 7,808,333 15.41 Hathway Mysore Cable Network Pvt. Ltd. 10 1,041,000 10.09 1,041,000 10.09 Hathway Software Developers Pvt. Ltd. 10 758,000 9.53 758,000 9.53 UTN Cable Communications Pvt. Ltd. 10 756,000 4.94 756,000 4.94 Hathway Kokan Crystal Network Pvt. Ltd. 10 145,135 4.68 145,135 4.68 Hathway New Concept Cable & Datacom Pvt. 10 150,000 3.23 150,000 3.23 Ltd. Hathway Broadband Pvt. Ltd. 10 2,500,000 2.50 2,500,000 2.50 Hathway Mantra Cable & Datacom Pvt. Ltd. 10 9,800 2.10 9,800 2.10 Hathway Enjoy Cable Network Pvt. Ltd. 10 10,000 0.01 10,000 0.01 Hathway Media Vision Pvt. Ltd. 10 65,040 - 65,040 - Ideal Cables Pvt. Ltd. 10 76,020 - 76,020 - Channels India Network Pvt. Ltd. 10 87,500 - 87,500 - Vision India Networks Pvt. Ltd. 10 87,700 - 87,700 - Hathway C-Net Pvt. Ltd. 10 100,000 - 100,000 - Chennai Cable Vision Network Pvt. Ltd. 10 136,800 - 136,800 - Hathway Nashik Cable Network Pvt. Ltd. 10 45,300 - 45,300 - Bee Network & Communication Pvt. Ltd. 10 99,989 - 99,989 - Win Cable and Datacom Pvt. Ltd. 10 200,000 - 200,000 - Elite Cable Network Pvt. Ltd. 10 48,000 - 48,000 - Hathway Space Vision and Cabletel Pvt. Ltd. 10 10,020 - 10,020 - Hathway Gwalior Cable & Datacom Pvt. Ltd. 10 10,000 - 10,000 - Hathway JMD Farukhabad Cable Network Pvt. 10 10,000 - 10,000 - Ltd. Binary Technology Transfers Pvt. Ltd. 100 1,000 - 1,000 - Hathway Internet Satellite Pvt Ltd. 10 10,000 - 10,000 - Hathway United Cables Pvt. Ltd. 10 10,000 - 10,000 - ITV Interactive Media Pvt. Ltd. 100 8,250 - 8,250 - Liberty Media Vision Pvt. Ltd. 10 10,000 - 10,000 - 485.16 485.16 Investment in Equity Shares of Joint Ventures Hathway Sai Star Cable & Datacom Pvt. Ltd. 10 82,463 11.10 68,850 10.40 Hathway MCN Pvt. Ltd. 10 963,000 8.01 963,000 8.01 Hathway Sonali Om Crystal Cable Pvt. Ltd. 10 68,000 5.29 68,000 5.29
Hathway Cable and Datacom Limited Annual Report 2019-20 117 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated)
Particulars Face March 31, 2020 March 31, 2019 Value Quantity Amount Quantity Amount Per Share ` Net 9 Online Hathway Pvt. Ltd. 10 5,000 2.01 5,000 2.01 Hathway Dattatray Cable Network Pvt. Ltd. 10 20,400 1.56 20,400 1.56 Hathway Cable MCN Nanded Pvt Ltd 10 1,305,717 1.37 1,305,717 1.37 Hathway Latur MCN Cable & Datacom Pvt. Ltd. 10 51,000 0.97 51,000 0.97 Hathway Palampur Cable & Datacom Pvt. Ltd. 10 15,300 0.68 15,300 0.68 Hathway Digital Saharanpur Cable & Datacom 10 10,200 0.48 10,200 0.48 Pvt. Ltd. Hathway Channel 5 Cable & Datacom Pvt. Ltd. 10 249,000 - 249,000 - Hathway ICE Television Pvt. Ltd. 10 102,000 - 102,000 - Hathway Prime Cable & Datacom Pvt. Ltd. 10 229,500 - 229,500 - Less : Impairment in value of investment 6.47 5.78 25.00 24.99 Investment in Equity Shares of Associates Hathway VCN Cablenet Pvt. Ltd. 10 12,520 - 12,520 - Pan Cable Services Pvt. Ltd. 10 10 - 10 - - - Investment in Partnership Firm in the nature of Joint Venture Hathway SS Cable & Datacom LLP 1.73 1.73 Less : Impairment in value of investment 1.73 1.73 - - Investments measured at amortised cost Unquoted Investment in Preference Shares of Subsidiary (fully paid up)* Hathway Digital Pvt. Ltd. 10 51,020 0.02 51,020 0.02 Investment in Government Securities National Savings Certificates 0.14 0.14 Investment in equity shares of other companies (designated at FVTOCI) Unquoted Hathway Cable Entertainment Pvt. Ltd. 10 47,009 - 47,009 - Hathway Jhansi JMDSR Cable & Datacom 10 60,000 - 60,000 - Pvt. Ltd. Hathway Patiala Cable Private Limited (f.k.a 10 71,175 3.08 71,175 3.08 Hathway Sukhamrit Cable & Datacom Private Limited ) 3.08 3.08 Total Non-current Investments 1,083.74 1,083.73 Aggregate amount of quoted investments 570.34 570.34 Market Value of quoted investments 172.93 288.71 Aggregate amount of unquoted investments 510.32 510.31 Aggregate fair value of investments designated at 3.08 3.08 FVTOCI Aggregate amount of impairment in value of 8.80 8.11 investments
*5% Non-Cumulative Redeemable Preference Shares of ` 10 each - The carrying value of the equity component included in investment in 5% Non-cumulative Redeemable Preference Shares issued by wholly owned subsidiary Hathway Digital Pvt. Ltd. is ` 0.02 (As at March 31, 2019 ` 0.02)
118 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) 2.04 Loans Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Security Deposits Considered good - Unsecured 6.58 8.46 2.69 2.93 Security Deposits - credit impaired 1.60 - - - Less: Allowance for bad & doubtful advances 1.60 - - - (A) 6.58 8.46 2.69 2.93 Loans to Related Parties Considered good - Unsecured Loan to Subsidiaries, Joint Ventures and 1.06 15.41 23.33 77.32 Associates Investment in Preference Share Capital 0.05 0.04 - - Loan receivables - credit impaired 76.66 79.18 - - 77.77 94.63 23.33 77.32 Less : Provision for impairment 76.66 79.18 - - (B) 1.11 15.45 23.33 77.32 Other Loans Loan receivables - credit impaired 0.41 0.41 - - 0.41 0.41 - - Less : Provision for impairment 0.41 0.41 - - (C) - - - - Total (A+B+C) 7.69 23.91 26.02 80.25
Note: No amount is due from any of the directors or officers of the Company, severally or jointly with any other person, or from firms where such director is a partner or from private companies where such director is a member.
2.05 Other Financial Assets Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Unsecured, considered good Share Application Money. 0.26 0.26 - - (Refer note 4.02 b) Bank deposits with more than 4.10 12.77 - - 12 months maturity Accrued Interest - - 131.33 1.44 Accrued Interest on Loans Given - - 0.36 - Unbilled Revenue * - - 0.07 0.08 Other Receivables - - 0.43 0.46 Total 4.36 13.03 132.19 1.98
Note: No amount is due from any of the directors or officers of the Company, severally or jointly with any other person, or from firms where such director is a partner or from private companies where such director is a member. * Classified as financial asset as right to consideration is unconditional upon passage of time.
Hathway Cable and Datacom Limited Annual Report 2019-20 119 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) 2.06 Deferred Tax Assets (Net) Particulars As at As at March 31, 2020 March 31, 2019
The balance comprises of temporary differences attributable to - Deferred tax assets in relation to:* Unabsorbed depreciation 184.91 283.44 Others 15.84 7.58 200.75 291.02 Deferred tax liabilities in relation to: Property, Plant and Equipment 24.13 23.35 24.13 23.35 Deferred Tax Assets (Net) 176.62 267.67
Significant Estimates - * The deferred tax assets recognised is mainly in respect of unabsorbed depreciation allowance and brought forward losses available for set off for an indefinite period in terms of applicable tax laws. Considering the revision in business plans and growth strategy of the Company, pursuant to fresh infusion of equity capital and implementation of New Tariff Order during the previous financial year, the Management is reasonably certain of future taxable income and hence recovery of such deferred tax assets.
The movement in deferred tax asset / liabilities during the Year ended March 31, 2020 and March 31, 2019: Particulars As at Recognised in As at March 31, 2019 Profit / (Loss) March 31, 2020
Deferred Tax Assets in relation to: Unabsorbed depreciation 283.44 (98.52) 184.92 Others 7.58 8.25 15.83 291.02 (90.27) 200.75 Deferred tax liabilities in relation to: Property, Plant and Equipment 23.35 (0.78) 24.13 23.35 (0.78) 24.13 Total 267.67 (91.05) 176.62
120 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Standalone Financial Statements FOR THE YEAR ENDED MARCH 31, 2020 (` in Crores unless otherwise stated) 2.07 Other Assets Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Capital Advances Unsecured, considered good unless stated otherwise Network Acquisitions 0.03 0.03 - - Advance to Suppliers 3.00 3.21 - - Doubtful 0.30 0.30 - - Less: Allowance for bad & doubtful advances 0.30 0.30 - - (A) 3.03 3.24 - - Advances Other Than Capital Advances Unsecured, considered good unless stated otherwise Prepaid expenses 0.13 1.53 2.19 3.45 Staff Advances - - 0.45 0.07 Sundry Advances - 0.11 3.22 10.15 Balance with Government authorities: GST Recoverable - - 28.08 15.77 Balance with Statutory Authorities 8.96 16.14 0.14 0.04 Advance Income Tax (Net of Provision) 27.43 22.65 - - Deposits paid under Protest 7.36 0.27 - - Other Receivables - - 0.02 0.12 Doubtful 15.19 8.61 - - Less: Allowance for bad & doubtful advances 15.19 8.61 - - (B) 43.88 40.71 34.10 29.61 Total (A+B) 46.91 43.95 34.10 29.61
Note: No amount is due from any of the directors or officers of the Company, severally or jointly with any other person, or from firms where such director is a partner or from private companies where such director is a member.
2.08 Inventories Particulars As at As at March 31, 2020 March 31, 2019 Stock of Spares and Maintenance Items 11.79 12.98 Total 11.79 12.98
2.09 Current Investments Particulars As at As at March 31, 2020 March 31, 2019 Unquoted Investments measured at fair value through profit and loss account Investment in Mutual Funds 27.72 2,993.56 Total 27.72 2,993.56 Aggregate amount of unquoted investments 27.45 2,964.70
Hathway Cable and Datacom Limited Annual Report 2019-20 121 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 2.10 Trade Receivables Particulars As at As at March 31, 2020 March 31, 2019 Trade receivables - Unsecured 53.21 56.80 53.21 56.80 Less: Provision for Impairment 53.00 50.30 Total 0.21 6.50
Note: No amount is receivable from any of the directors or officers of the Company, severally or jointly with any other person, or from firms where such director is a partner or from private companies where such director is a member.
2.11 Cash and Cash Equivalents Particulars As at As at March 31, 2020 March 31, 2019 Balances with banks: In Current Accounts 4.23 22.14 Deposits with banks with original maturity of 3 months or less 1,045.78 30.11 Cheques / drafts on Hand 0.12 - Cash in hand 0.21 0.87 Total 1,050.34 53.12
2.12 Bank Balances Other Than Cash And Cash Equivalents Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Margin money deposit* 4.10 12.77 2,000.14 - Deposits with original maturity for more than - - - 50.00 3 months but less than 12 months 4.10 12.77 2,000.14 50.00 Less: Amount disclosed under other financial 4.10 12.77 - - asset (Refer Note 2.05) Total - - 2,000.14 50.00
*Marked under lien in favour of Banks
2.13 Current Tax Assets (Net) Particulars As at As at March 31, 2020 March 31, 2019 Current tax assets Advance Income Tax (Net of Provisions) 42.59 42.54 Total 42.59 42.54
122 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 2.14 Equity Share Capital Particulars As at As at March 31, 2020 March 31, 2019 Authorised Capital 1,999,000,000 (March 31, 2019:1,999,000,000) Equity Shares of ₹ 2 each 399.80 399.80 Total 399.80 399.80 Issued, Subscribed and Paid up Capital 1,770,104,500 (March 31, 2019: 1,770,104,500) Equity Shares of ₹ 2 each 354.02 354.02 fully paid-up Total 354.02 354.02
a) Reconciliation of the number of shares outstanding as at the beginning and end of the reporting period: Particulars As at March 31, 2020 As at March 31, 2019 Number Amount Number Amount Equity Shares of ` 2 each Shares Outstanding at the beginning 1,770,104,500 354.02 830,494,500 166.10 of the year Shares Issued during the year - 939,610,000 187.92 under Preferential allotment (Refer note (e) below) Shares Outstanding at the end of 1,770,104,500 354.02 1,770,104,500 354.02 the year
b) Rights, Preference and restrictions attached to Shares; Terms/ Rights attached to Equity Shares The Company has issued only one class of equity shares having face value of ` 2 (March 31, 2019 : ` 2) per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by the shareholders.
c) Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate Name of the Shareholder As at As at March 31, 2020 March 31, 2019 No. of No. of Shares held Shares held Equity Shares of ` 2 each Jio Content Distribution Holdings Private Limited $ 749,382,454 749,382,454 Jio Internet Distribution Holdings Private Limited $ 300,337,845 300,337,845 Jio Cable and Broadband Holdings Private Limited $ 223,980,916 223,980,916
$ Controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited - Wholly owned Subsidiary of Reliance Industries Limited, is the sole beneficiary.
Hathway Cable and Datacom Limited Annual Report 2019-20 123 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) d) Details of shareholders holding more than 5% shares in the Company:
Name of the Shareholder As at March 31, 2020 As at March 31, 2019 No. of % of Holding No. of % of Holding shares held shares held Equity Shares of ` 2 each Mr. Akshay Raheja 121,413,000 6.86 121,413,000 6.86 Mr. Viren Raheja 119,553,000 6.75 119,553,000 6.75 Hathway Investments Private Limited 112,645,015 6.36 112,645,015 6.36 Jio Content Distribution Holdings 749,382,454 42.34 749,382,454 42.34 Private Limited Jio Internet Distribution Holdings 300,337,845 16.97 300,337,845 16.97 Private Limited Jio Cable And Broadband Holdings 223,980,916 12.65 223,980,916 12.65 Private Limited
e) During previous financial year, the Company had allotted on preferential basis 3,08,00,000 equity shares of` 2 each at a premium of ` 30.35 per share to Hathway Investments Private Limited. Further, during previous financial year, the Company had allotted on preferential basis 908,810,000 equity shares of ` 2 each at a premium of ` 30.35 per share to the following entities (the “Acquirers”) aggregating to ` 2,940 representing 51.34% of post allotment equity share capital of the Company:
Particulars No. of shares Amount Jio Content Distribution Holdings Private Limited 534,698,609 1,729.75 Jio Internet Distribution Holdings Private Limited 214,296,755 693.25 Jio Cable and Broadband Holdings Private Limited 159,814,636 517.00 Total 908,810,000 2,940.00
Pursuant to the aforesaid preferential allotment, the Acquirers have acquired sole control of the Company and the Acquirers and the Persons Acting in Concert (PAC) namely Reliance Industries Limited, Digital Media Distribution Trust, Reliance Content Distribution Limited and Reliance Industrial Investments and Holdings Limited have become part of the ‘promoter and promoter group’ of the Company. During the previous financial year, on February 26, 2019 the Acquirers acquired an aggregate of 364,891,215 equity shares representing 20.61% of the total paid-up equity share capital of the Company pursuant to an open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Accordingly, as at March 31, 2019, the aggregate holding of the Acquirers in the Company stood at 1,273,701,215 equity shares of the Company representing 71.96% of the total paid-up equity share capital of the Company.
124 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 2.15 Other Equity Particulars As at As at March 31, 2020 March 31, 2019 Retained earnings (761.09) (777.76) Securities Premium 4,725.79 4,725.79 Total 3,964.70 3,948.03
Description of the nature and purpose of each reserve within equity is as follows: (a) Retained Earning : Retained earnings are the losses that the Company has incurred till date. (b) Securities Premium : Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
2.16 Non Current Borrowings Particulars Non Current portion Current maturities of long term debts As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Term Loans Secured From Banks - 405.16 - 88.70 From Others 43.99 295.02 17.55 92.91 Inter Corporate Deposit - 100.00 - - 43.99 800.18 17.55 181.61 Less: Amount disclosed under the head Other Financial Liabilities (Refer Note No. 2.17) - Current maturities of Long-Term Debts - - 17.55 181.61 Net Amount 43.99 800.18 - -
Current Borrowings Particulars As at As at March 31, 2020 March 31, 2019 Loans repayable on demand Secured Overdraft with bank 908.58 - Unsecured Loans from Related Parties - 2.40 Total 908.58 2.40
Hathway Cable and Datacom Limited Annual Report 2019-20 125 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) a) Nature of Security and terms of repayment for borrowings: Sr. Nature of Security Terms of Repayment As at March 31, 2020 As at March 31, 2019 No. Non- Current Non- Current Current Current Non-Current Borrowings 1 Term Loan from Others Secured 1.01 Aditya Birla Finance Ltd. i Secured by first pari passu Seventeen equal quarterly 44.12 17.65 61.76 13.24 charge on present & future installments starting movable and immovable Fixed after 1 year from the Assets of the Company and of date of first drawdown of Hathway Digital Private Limited Loan. Applicable Rate of (HDPL), a 100% subsidiary of Interest is 6 months ICICI the Company MCLR+ 1.65% ii Secured by first pari passu hypothecation of present & future Current Assets of the Company and of HDPL Gross Borrowings 44.12 17.65 61.76 13.24 Add: Loan fully repaid prior to - - 743.87 171.07 the Balance sheet date Less: Unamortised upfront fees 0.13 0.09 5.45 2.69 on borrowing Total Long Term Borrowings 43.99 17.55 800.18 181.61 Current Borrowings 2.0 Overdraft Secured 2.01 Axis Bank Ltd Secured by Fixed Deposits of (Sanctioned Amount - 908.58 - - the Company of ` 930 ` 930) 3.0 From Related Parties Unsecured 3.01 Hathway Broadband Private - - - 2.40 Limited Total Short Term Borrowings - 908.58 - 2.40
b) Details of Non - Current borrowings guaranteed by Hathway Digital Private Limited, a wholly owned subsidiary of the Company: Particulars As at As at March 31, 2020 March 31, 2019 1. Term loans from banks - 499.99 2. Term Loan From others 61.76 388.75 total non current borrowings 61.76 888.74
126 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) c) The carrying amount of assets pledged as security for borrowings are disclosed below: Sr. Particulars As at As at No. March 31, 2020 March 31, 2019 1 Current i Inventories 11.79 12.98 ii Trade Receivables 0.21 6.50 iii Cash and Cash Equivalents 1,050.34 53.12 iv Bank balances other than Cash and Cash Equivalents* 2,000.14 50.00 v Loans 26.02 80.25 vi Other financial assets 132.19 1.98 vii Other Current Assets 3.81 10.25 3,224.50 215.08 2 Non - current i Property, Plant and Equipment 771.56 751.75 ii Capital Work In Progress 26.61 51.56 iii Other Intangible Assets 74.16 51.98 iv Loans 7.69 23.91 v Other financial assets 4.36 13.03 vi Other Non-Current Assets 11.99 19.50 896.37 911.73 Total assets pledged as security 4,120.87 1,126.81
* Margin money deposits of ` 930 pledged as security for Overdraft facility availed by the company and ` 1070 pledged for Overdraft facility availed by Hathway Digital Private Limited, 100% subsidiary of the company.
2.17 Other Financial Liabilities Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Current maturities of Long-Term Debts - - 17.55 181.61 (Refer note no. 2.16) Security Deposits 12.05 9.63 - - Interest accrued and not due - - 0.93 3.64 Salary and Employee benefits payable - - 4.62 8.23 Payables for acquisition of property, plant and equipment - Micro enterprises and small - - 0.25 - enterprises - Capital creditors - - 31.89 86.34 Lease Liability - - 0.28 - Other Financial Liabilities - - 23.79 28.67 Total 12.05 9.63 79.31 308.49
Hathway Cable and Datacom Limited Annual Report 2019-20 127 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 2.18 Provisions Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Employee Benefits Provision for Leave Encashment 2.18 2.21 0.17 0.30 (A) 2.18 2.21 0.17 0.30 Others Mark to Market Losses on Currency Swap - 0.57 - - (B) - 0.57 - - Total (A+B) 2.18 2.78 0.17 0.30
2.19 Other Liabilities Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Income received in advance - - 76.01 72.42 Statutory Payables - - 20.32 5.50 Gratuity (Funded) 2.12 3.38 - - Other Liabilities - - 9.02 6.59 Total 2.12 3.38 105.35 84.51
3.01 Revenue from Operations Particulars Year ended Year ended March 31, 2020 March 31, 2019 Revenue from operations Sale of services 567.60 527.08 Sale of products * 0.30 Other operating revenues 0.09 0.25 Total 567.69 527.63
* Amount less than ` 50,000/-
128 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 3.02 Other Income Particulars Year ended Year ended March 31, 2020 March 31, 2019 Interest income earned on financial assets measured at Amortised Cost: Bank Deposits 185.00 4.18 Interest on Loans 7.02 2.54 Corporate guarantee/ unwinding interest - 2.17 Dividend Income from associate 4.20 4.20 Other Non - operating income Amount No Longer Payable Written Back 0.14 0.02 Interest on Income Tax Refund 3.11 - Miscellaneous Income 0.20 0.16 Other gains and losses Gain on disposal of Current Investments (Net) 50.40 - Net Gain on financial assets measured at fair value through profit and loss 0.27 41.59 Total 250.34 54.86
3.03 Other Operational Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 Commission 52.22 39.16 Bandwidth & Lease Line Cost 53.73 40.75 Licence Fees 25.56 1.58 Repairs and Maintenance ( Plant and Machinery ) 6.50 3.40 Rent 15.27 15.77 Consultancy and Technical Fees 2.91 4.75 Other Sundry Operational Cost 15.90 13.50 Software and Programming Cost 2.53 2.33 Freight & Octroi Charges 0.87 0.02 Hire Charges 4.81 1.28 Total 180.30 122.54
3.04 Employee Benefits Expense Particulars Year ended Year ended March 31, 2020 March 31, 2019 Salaries & Bonus 50.93 44.96 Contribution to provident and other funds 3.10 2.81 Staff Welfare expenses 2.78 2.07 Total 56.81 49.84
Hathway Cable and Datacom Limited Annual Report 2019-20 129 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 3.05 Finance Cost Particulars Year ended Year ended March 31, 2020 March 31, 2019 Interest and Finance charges on financial liabilities 98.72 86.56 Exchange differences regarded as an adjustment to borrowing cost - 6.04 Other borrowing costs 17.34 9.98 Interest expenses on Leases Laibility 0.04 - Total 116.10 102.58
3.06 Depreciation, Amortisation And Impairment Particulars Year ended Year ended March 31, 2020 March 31, 2019 Depreciation of Property, Plant and Equipment 91.90 94.01 Amortisation of Intangible Assets 16.89 9.07 Depreciation on Right of Use Assets 0.38 - Impairment of Property, Plant and Equipment 42.80 12.84 Impairment of Other Intangible Assets 0.22 - Total 152.19 115.92
3.07 Other Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 Service Charges 120.65 89.95 Bad Debts - 3.24 Less: Transfer from impairment of trade receivables (Expected Credit Loss) - 3.24 - - Advances Written Off 2.00 - Less: Transfer from provision for impairment 2.00 - - - Impairment of trade receivables (Expected credit loss) 3.03 2.40 Electricity Expenses 16.22 15.55 Advertisement & Promotion expenses 15.58 12.65 Legal & Professional Charges 3.76 3.46 Rent - Offices 4.70 4.20 Conveyance 3.43 3.29 Repairs & Maintenance (Others) 3.31 1.96 Office Expenses 1.69 1.45 Travelling 2.18 2.55 Communication Charges 1.79 1.98 Rates & taxes 3.80 1.63 Loss on disposal / shortage of Property, Plant and Equipment 5.98 4.49 Printing & Stationery 0.99 0.66 Insurance Charges 1.35 1.77 Business Promotion Expenses 0.07 0.22
130 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Particulars Year ended Year ended March 31, 2020 March 31, 2019 Sundry Advances Written Off 0.09 * Interest on Taxes 1.62 2.39 Share of Loss from LLP 0.14 0.20 Loss on Foreign Exchange Fluctuation (Net) 2.47 11.58 Impairment of advances 2.00 - Sitting Fees 0.28 0.35 Miscellaneous Expenses 2.97 0.67 Auditor’s Remuneration - Statutory Audit Fees 0.36 0.39 - Limited Review, Consolidation and Certification Fees 0.47 0.35 Total 198.93 164.14
*Amount less than ` 50,000
3.08 Exceptional Items* Particulars Year ended Year ended March 31, 2020 March 31, 2019 Impairment of trade receivables and exposure to certain entities including Joint 6.01 49.74 Ventures Expenses relating to equity infusion - 25.87 Write down to Property, Plant and Equipments - 8.93 Total 6.01 84.54
*Refer Note 4.05
4.01 Earnings Per Share Particulars Year ended Year ended March 31, 2020 March 31, 2019 Basic earnings per share : (`) Attributable to equity holders of the Company 0.09 2.08 Diluted earnings per share : (`) Attributable to equity holders of the Company 0.09 2.08 Nominal value of Ordinary shares (` per Share): 2.00 2.00 Reconciliation of earnings used in calculating earnings per share : Basic earnings per share Profit attributable to equity holders of the Company used in calculating basic 16.64 210.60* earnings per share Diluted earnings per share Profit attributable to equity holders of the Company used in calculating diluted 16.64 210.60* earnings per share Weighted average number of shares used as the denominator in calculating 1,770,104,500 1,000,520,281 basic and diluted earnings per share
*Net of share issue expenses debited to securities premium.
Hathway Cable and Datacom Limited Annual Report 2019-20 131 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 4.02 Contingent Liabilities a) The Company had challenged computation of levy of license fees for pure Internet services before Telecom Disputes Settlement & Appellate Tribunal (TDSAT). The case has been disposed off by TDSAT during the financial year with a direction to Department of Telecommunication (DOT) that there should be a level playing field for all the Internet Service Providers (ISPs) and accordingly, DOT should raise its revised demands for the License Fee on the basis of same concept of Adjusted Gross Revenue (AGR) as is being done in the case of ISPs holding license under the old regime. TDSAT has further directed DOT to come up with a uniform policy in respect of License Fee for all the ISPs. DOT has not filed any appeal with High Court against said order, till date and is yet to issue uniform policy. The Company has continued to pay License Fee based on the concept of AGR for ISPs holding license under the old regime and the same has been charged to Statement of Profit and Loss.
b) The minority shareholders of the erstwhile joint venture company, Hathway Rajesh Multichannel Pvt. Ltd., filed an arbitration petition against the Company before the High Court, Bombay, which was referred to a sole arbitrator in August 2016. The minority shareholders, in their statement of claim have sought, amongst other reliefs, payment of ` 54.98 (March 31, 2019: ` 54.98) under various heads. The Company has refuted the claims and has made counter claim of ` 91.17 (March 31, 2019: ` 91.17) towards inter-alia outstanding content cost, loans, payments and damages/ compensation for the loss of financial and management credibility, goodwill etc. The matter is currently pending.
c) On conclusion of investigation by the Directorate of Revenue Intelligence (DRI) on alleged evasion of customs duty on import of software licence of viewing cards, the Commissioner of Customs (Import) has passed an order demanding Custom’s Duty of ` 8.95 and penalty of ` 8.95. The Company has deposited ` 0.67 under protest and filed an appeal against the order before Customs and Excise and Service Tax Appellate Tribunal (CESTAT), Western Zonal Branch, Mumbai. Such appeal is pending before the CESTAT.
d) In the matter relating to non-exclusion of certain allowances from the definition of “Basic Wages” of the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and the decision of the Supreme Court in case of Vivekananda Vidyamandir, in the assessment of the management, the PF authority is not likely to raise any demand for the period prior to March 31, 2019 and accordingly, no provision has been made in these financial statements.
e) Claims against the Company, other than those stated above, not acknowledged as debts are as under:
Matters with As at As at March 31, 2020 March 31, 2019 Operators & Others 0.49 0.50 Income Tax Matter under Appeal 0.16 - Other Statutory Authorities 0.40 0.35 VAT Authorities 0.75 2.19 Service Tax Authorities - 3.74 Total 1.80 6.78
Pursuant to Business Transfer Agreement dated March 24, 2017, the Company has transferred its Cable Television business which inter alia includes claims against the Company not acknowledged as debts, by way of slump sale to its wholly owned subsidiary Hathway Digital Private Limited (HDPL). Accordingly, the details of such claims, litigation etc. relating to Cable Television business transferred to HDPL are not disclosed hereinabove
f) Foreseeable losses The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ applicable accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.
132 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) g) Note on pending litigations The Company has reviewed its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements. 4.03 Financial Corporate Guarantee The Company has given Corporate Guarantees of ` 1057.70 (March 31, 2019: ` 1,012.79) to Banks & ` 1.24 (March 31, 2019: ` 2.76) to Others towards various credit facilities extended by them to related parties. The Company has given Letter of Comfort of ` 7.46 (March 31, 2019: ` 58.07) to Banks towards various credit facilities extended by them to related parties.
4.04 Capital and Other Commitments Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to ` 34.87 (March 31, 2019: ` 26.69). As a part of business strategy, the Company has expanded its area of operations in various parts of the country by entering into arrangements with local partners. Such operations are in the form of subsidiaries/joint ventures. Since operations of such entities are significantly dependent on the company’s policies, the Company is committed to provide the required support towards the operations of such entities including financial support that may be required to meet commitments/ obligations of such entities.
4.05 Exceptional Items (a) During the year, the Company has Impaired (i) Investments in Joint ventures; and (ii) advances and receivable from erstwhile joint venture, which is currently under litigation. This impairment having one-time, non-routine impact on financial statements, hence been disclosed as “Exceptional Item”” in Financial Statements. (b) During the previous financial year, in view of the New Regulatory Framework for Broadcasting and Cable services sector notified by the Telecom Regulatory Authority of India (TRAI), which was effective from 1st February 2019, resulted into changes in pricing mechanism and arrangements involving joint ventures and considering equity infusion; the Management, based on a review, has provided for (i) impairment of trade receivables and exposure to certain entities including joint ventures; (ii) write down to the recoverable value of certain assets; (iii) expenses relating to equity infusion. These adjustments,having one-time, non-routine material impact on financial statements, hence been disclosed as “Exceptional Item” in Financial statements.
4.06 Employee Benefits a) Defined Benefit Plans: The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 to 26 days’ salary for each completed year of service subject to a maximum of ` 0.20 (March 31, 2019: ` 0.20). Vesting occurs upon completion of five continuous years of service in accordance with Indian law. The Present value of the defined benefit obligations and related current service cost were measured using the Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date.
Hathway Cable and Datacom Limited Annual Report 2019-20 133 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields. If the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment with LIC of India and Exide Life Insurance Corporation of India. Interest Risk A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s debt investments Longevity Risk The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks. Salary Risk The Gratuity benefit, being based on last drawn salary, will be critically effected in case of increase in future salaries being more than assumed.
Particulars Gratuity March 31, 2020 March 31, 2019 1 Expense recognized in the statement of Profit and Loss Current Service Cost 0.63 0.55 Net Interest 0.24 0.21 Past Service Cost - - Expense recognized in the statement of Profit and Loss 0.87 0.76 2 Other Comprehensive Income (OCI): Measurement of net defined benefit liability Actuarial (gains)/ losses arising from changes in demographic 0.32 (0.03) assumptions Actuarial (gains)/ losses arising from changes in financial 0.21 0.06 assumption Actuarial (gains)/ losses arising from experience adjustments (0.48) 0.18 Return on plan asset excluding net interest (gain)/(losses) (0.08) 0.01 Total Actuarial (Gain)/loss recognised in OCI (0.04) 0.22 3 Change in benefit obligations: Projected benefit obligations at beginning of the year 4.52 3.80 Current Service Cost 0.63 0.55 Interest Cost 0.31 0.28 Past Service Cost - - Benefits Paid (0.43) (0.32) Actuarial (Gain) / Loss Actuarial (gains)/ losses arising from changes in demographic 0.32 (0.03) assumptions Actuarial (gains)/ losses arising from changes in financial 0.21 0.06 assumption Actuarial (gains)/ losses arising from experience adjustments (0.48) 0.18 Projected benefit obligations at end of the year 5.07 4.52
134 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Particulars Gratuity March 31, 2020 March 31, 2019 4 Fair Value of Plan Assets Opening Fair Value of Plan Asset 1.13 0.94 Return on Plan Assets excl. interest income (gain)/losses 0.08 (0.02) Interest Income 0.07 0.07 Contributions by Employer 0.13 0.46 Assets acquired/ (settled)* 1.97 - Benefits Paid (0.43) (0.32) Fair Value of Plan Assets at end of the year 2.95 1.13 *On account of business combination / inter group transfer 5 Net Liability Projected benefit obligations at end of the year 5.07 4.52 Fair Value of Plan Asset at the end of the year 2.95 1.13 Net Liability 2.12 3.38 6 The net liability disclosed above relates to funded plans are as follows Projected benefit obligations at end of the year 5.07 4.52 Fair Value of Plan Asset at the end of the year 2.95 1.13 Deficit of gratuity plan 2.12 3.38 7 Sensitivity Analysis Present value of benefit obligation at the end of the year on 0.5 % increase in discount rate 4.91 4.37 0.5 % decrease in discount rate 5.24 4.67 0.5 % increase in rate of salary increase 5.24 4.65 0.5 % decrease in rate of salary increase 4.90 4.38 1% increase in attrition rate 5.10 4.55 1% decrease in attrition rate 5.05 4.49 10% increase in mortality rate 5.07 4.52 10% decrease in mortality rate 5.07 4.52 8 Principal assumptions used for the purpose of actuarial valuation Mortality IALM (2012-14) Ult IALM (2012-14) Ult Interest /discount rate 6.90% 7.30% Rate of increase in compensation 5.00% 5.00% Expected average remaining service 7.39 6.11 Employee Attrition Rate ( Past service(PS) ) 21-30 Year : 14.3% 21-30 Year : 14.3% 31-40 Year : 16.9% 31-40 Year : 16.9% 41-50 Year : 10.00% 41-50 Year : 10.00% 51-57 Year : 0.00% 51-57 Year : 0.00% 9 Investment Details Insurer Managed Funds 100.00% 100.00%
Hathway Cable and Datacom Limited Annual Report 2019-20 135 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) b) Defined Contribution Plans: The Company contributes towards provident fund and other defined contribution benefit plans for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the defined contribution plan to fund the benefits. The Total expenses recognised in the statement of Profit and Loss is ` 2.23 (March 31, 2019: ` 2.16) represents contribution payable to these plans by the Company at the rates specified in the rules of plan.
4.07 Disclosures As Required By Indian Accounting Standard (Ind AS) 108 Operating Segments As the Company’s business activity falls within a single business segment in terms of Ind AS 108 on Operating Segments, the financial statement are reflective of the information required by IndAS 108.
4.08 Leases (a) Lessee: The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the balance sheet at the date of initial application i.e. April 1, 2019 is 8.75% The difference between the lease obligation recorded as of March 31, 2019 under Ind AS 17 disclosed under Note 4.08 of standalone financial statements forming part of 2019 Annual Report and the value of the lease liability as of April 1, 2019 is primarily on account of inclusion of extension and termination options reasonably certain to be exercised, in measuring the lease liability in accordance with Ind AS 116 and discounting the lease liabilities to the present value under Ind AS 116. Short term leases accounted in the statement of Profit and Loss for the FinancialYear 2019-20 is ` 24.78. The Company’s significant leasing arrangements in terms of Ind AS 116 on lease are in respect of Leases for Premises and Equipments. Some of these lease arrangements have price escalation clauses. The period of these leasing arrangements, range between eleven months to nine years and are renewable by mutual consent.
(b) Lessor: The right to use granted to subsidiaries in respect of Access devices are not classified as lease transactions as the same are not for an agreed period of time.
4.09 The details of amounts outstanding to Micro and Small Enterprises based on available information with the Company is as under : Particulars March 31, 2020 March 31, 2019 Principal amount due and remaining unpaid 0.25 Nil Interest due on above and the unpaid interest Nil Nil Interest paid Nil Nil Payment made beyond the appointed day during the year Nil Nil Interest due and payable for the period of delay Nil Nil Interest due and remaining unpaid Nil Nil Interest accrued and remaining unpaid Nil Nil Amount of further interest remaining due and payable in succeeding year Nil Nil
4.10 Capital Management The Company’s objective while managing capital is to maintain stable capital structure to support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and / or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital that would enable to maximise the return to stakeholders. The Company’s capital requirement is mainly to fund its business expansion and repayment of borrowings. The funds raised through issue of equity during the previous financial year is kept in Fixed Deposits with scheduled bank. During the year, the company has availed overdraft facility against such Fixed Deposits for replacing high interest bearing borrowings availed
136 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) earlier. Other than this funding, the principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company has adhered to material externally imposed conditions relating to capital requirements and there has not been any delay or material default during the period covered under these financial statements with respect to payment of principal and interest. No lender has raised any matter that may lead to breach of covenants stipulated in the underlying documents.
4.11 Financial Instruments : (i) Methods & assumptions used to estimate the fair values The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, other bank balances, deposits, loans to employees, trade payables, payables for acquisition of non- current assets, demand loans from banks and cash and cash equivalents are considered to be the same as their fair values. b) The fair values for long term loans, long term security deposits given and remaining non current financial assets were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs. c) The fair values of long term security deposits taken and non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs. d) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
(ii) Categories of financial instruments The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: inputs which are not based on observable market data
Particulars As at March 31, 2020 As at March 31, 2019 Carrying values Fair value Carrying values Fair value Financial assets Measured at amortised cost Investment in Government securities 0.14 0.14 0.14 0.14 Trade receivables 0.21 0.21 6.50 6.50 Loans 33.71 33.71 104.16 104.16 Cash and Bank balances 3,054.58 3,054.58 115.89 115.89 Other financial assets 132.45 132.45 2.24 2.24 Total (A) 3,221.09 3,221.09 228.93 228.93 Measured at fair value through profit or loss Investment in mutual funds 27.72 27.72 2,993.56 2,993.56 Total (B) 27.72 27.72 2,993.56 2,993.56
Hathway Cable and Datacom Limited Annual Report 2019-20 137 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Particulars As at March 31, 2020 As at March 31, 2019 Carrying values Fair value Carrying values Fair value Measured at fair value through other comprehensive income Investment in equity instruments of 3.08 3.08 3.08 3.08 other companies Total (C) 3.08 3.08 3.08 3.08 Total Financial assets (A+B+C) 3,251.89 3,251.89 3,225.57 3,225.57 Financial liabilities Measured at amortised cost Borrowings# 970.12 970.12 984.19 984.19 Trade payables 44.28 44.28 44.40 44.40 Other financial liabilities 73.81 73.81 136.51 136.51 Total financial liabilities (A) 1,088.21 1,088.21 1,165.10 1,165.10 Measured at fair value through profit or loss Derivative Instruments - - 0.57 0.57 Total financial liabilities (B) - - 0.57 0.57 Total Financial liabilities (A+B) 1,088.21 1,088.21 1,165.67 1,165.67
# includes current maturities of long term debts
Level wise disclosure of financial instruments Particulars As at As at Level Valuation techniques and March 31, 2020 March 31, 2019 key inputs Investment in equity instruments of 3.08 3.08 3 Price earning ratio other companies method Investment in Mutual funds 27.72 2,993.56 1 Closing Net Asset Value of Mutual Fund Currency Swap contracts - Liability - 0.57 2 Quotes from banks or dealers
4.12 Financial Risk Management The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Board of Directors. The details of different types ofriskand management policy to address these risks are listed below: The business activities of Company expose it to financial risks namely Credit risk, Liquidity risk and Market risk. In order to minimise any adverse effects on the financial performance of the Company, it uses derivative financial instruments, such as foreign exchange forward contracts, foreign currency swap contracts, call options to hedge certain foreign currency risk exposures, wherever considered appropriate, and follows policies set up by the Treasury function under policies approved by the Board of Directors.
1. Credit risk Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge its obligation as agreed. The exposure of the Company to credit risk arises mainly from the trade receivables, unbilled revenue, loans given, financial guarantee contract and derivative financial instruments. Credit risks from balances with banks and financial institutions are managed in accordance with the Company policy. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit-ratings assigned by credit-rating agencies.
138 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) The Company’s major revenue streams arises from services provided to end use customers in the form of monthly subscription income, which predominantly follows a prepaid model. The trade receivables and unbilled revenue on account of subscription income are typically un-secured and derived from sales made to large number of independent customers. As the customer base is distributed economically and geographically, there is no concentration of credit risk. The Company follows a simplified approach (i.e based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables and unbilled revenue. For the purpose of measuring the lifetime ECL allowance for trade receivables and unbilled revenue, the Company uses a provision matrix which comprises a very large number of small balances grouped into homogenous groups and assessed for impairment collectively. In addition, in case there are events or changes in circumstances indicating individual or class of trade receivables is required to be reviewed on qualitative aspects, necessary provisions are made.
Reconciliation of changes in the loss allowances measured using life-time expected credit loss model - Trade receivables Particulars Amount As at April 01, 2018 26.96 Provided during the year 26.58 Amounts written off 3.24 Reversals of Provision - As at March 31, 2019 50.30 Provided during the year 3.72 Amounts written off 1.02 Reversals of Provision - As at March 31, 2020 53.00
2. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from both domestic and international banks at an optimised cost. In addition, processes and policies related to such risks are overseen by senior management. The Company’s senior management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.
Maturities of financial liabilities The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments. As at March 31, 2020 less than 1 year 1 to 5 year Total Non-Derivatives Trade payables 44.28 - 44.28 Borrowings * 926.23 44.12 970.35 Lease Liability 0.28 - 0.28 Other financial liabilities 61.48 12.05 73.53 Total 1,032.27 56.17 1,088.45 Derivatives (net settled) Currency Swap Contract - - - Total - - - * Include ` 0.22 as Prepaid Finance Charges.
Hathway Cable and Datacom Limited Annual Report 2019-20 139 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
As at March 31, 2019 less than 1 year 1 to 5 year Total Non-Derivatives Trade payables 44.40 - 44.40 Borrowings * 186.71 805.63 992.34 Other financial liabilities 126.88 9.63 136.51 Total 357.99 815.26 1,173.25 Derivatives (net settled) Currency Swap Contract 0.57 - 0.57 Total 0.57 - 0.57
* Include ` 8.15 as Prepaid Finance Charges. The Company from time to time in its usual course of business issues financial guarantees and letter of comfort to certain subsidiaries, associates and joint ventures. Company has issued corporate guarantee and letter of comfort for debt of ` 1,066.40 (March 31, 2019: ` 1,073.62). The outflow in respect of these guarantees and letter of comfort will arise only upon default of such subsidiaries, associates and joint ventures. ` 1,066.40 (March 31, 2019: ` 422.44) is due for repayment within 1 year and ` NIL (March 31, 2019: ` 651.18) is due for repayment within 1 - 5 Years from the reporting date.
Financing arrangements The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements. The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point in time there is sufficient availability of line of credit. The Company pays special attention to the net operating working capital invested in the business. In this regard, as in previous years, considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as to optimise accounts payable with the support of banking arrangements to mobilise funds.
3. Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed in the ordinary course of business to following risks: (a) foreign exchange risk, (b) interest rate risk and (c) price risk.
(a) Market Risk – Foreign Exchange Foreign exchange risk arises on all recognised monetary assets and liabilities which are denominated in a currency other than the functional currency of the Company. The Company has foreign currency trade payables.
Foreign currency risk is managed by following established risk management policies, which inter alia includes monitoring the movements in currencies in which the borrowings / capex vendors are payable and hedging the exposure to foreign currency risk, wherever considered appropriate, by entering into forward currency contracts, call options and currency swaps contracts.
The Company does not enter into or trade financial instrument including derivative for speculative purpose.
140 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) The carrying amount of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exposure Particulars As at As at March 31, 2020 March 31, 2019 USD USD Assets Liabilities Trade payables 19.30 61.62 Derivatives Currency Swaps - 93.64
Details of Unhedged Foreign Currency Exposure is as under:- Particulars As at March 31, 2020 As at March 31, 2019 Amount Amount in INR Amount Amount in INR in Foreign in Foreign Currency Currency Derivatives Liabilities - Currency Swap USD - - 1.35 93.64 Accounts Payables USD 0.25 19.30 0.89 61.62 Other Firm Commitments USD 0.29 21.73 0.35 23.97
The Company has booked INR USD Cross Currency Swap Contracts of USD NIL (March 31, 2019 : USD 3.34) against the underlying INR borrowing of ` NIL (March 31, 2019 : ` 214.78). Outstanding at the year end for the same is ` NIL (March 31, 2019: ` 92.50) and Currency Swap Contract amount is USD NIL (March 31, 2019: USD 1.35). The actual interest earned on notional INR deposit, interest paid on notional USD borrowing and marked to market loss on USD exposure aggregating net gain / (loss) of ` (1.88) (March 31, 2019 : ` 1.80 ) are included under finance cost in note number 3.05 in Notes to the financial statements.
Foreign currency sensitivity 1 % increase or decrease in foreign exchange rates will have the following impact on profit / (loss) before tax and on other components of equity Particulars Impact on Profit : Increase/(Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 1 % Increase 1 % Increase 1 % Decrease 1 % Decrease USD (0.19) (1.55) 0.19 1.55
Particulars Impact on other components of equity : Increase/(Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 1 % Increase 1 % Increase 1 % Decrease 1 % Decrease USD (0.19) (1.55) 0.19 1.55
Hathway Cable and Datacom Limited Annual Report 2019-20 141 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) (b) Market Risk – Interest Rate Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. During the year the Company is less exposed to interest rate risk because the Company has borrowed funds substantially at Fixed interest rates. The interest rate risk is managed by the Company by the use of interest rate swap wherever relevant and by monitoring monthly cash flow which is reviewed by management to prevent loss of interest.
The exposure of the company’s borrowings to interest rate changes at the end of the reporting period are as follows: Particulars March 31, 2020 March 31, 2019 Variable rate borrowings* 61.76 751.19 Fixed rate borrowings* 908.58 241.15 Derivatives Foreign Currency Interest Rate Swaps Currency Swaps - 92.50
* Include ` 0.22 (March 2019: ` 8.15) as Prepaid Financial Charges. Interest rate sensitivity analysis The sensitivity analysis below have been determined based on the exposure to interest rates on the borrowings at the end of the reporting period. For floating rate borrowings, the analysis is prepared assuming the amount of borrowing outstanding at the end of the reporting period was outstanding for whole of the year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel.
Particulars Impact on Profit: Impact on equity Increase/(Decrease) Increase/(Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Interest rates - increase by (0.62) (7.51) (0.62) (7.51) 100 basis points* Interest rates - decrease by 0.62 7.51 0.62 7.51 100 basis points*
* assuming all other variables as constant The sensitivity disclosed in the above table is attributable to variable interest rate borrowings and the interest swaps. The above sensitivity analysis is based on a reasonably possible change in the under-lying interest rate of the Company’s borrowings in INR & USD (being the significant currencies last year in which it has borrowed funds), while assuming all other variables (in particular foreign currency rates) to be constant.
(c) Market Risk - Price Risk: The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. At March 31 2020, the investments in mutual funds is ` 27.72 (March 31, 2019 : ` 2,993.56). These are exposed to price risk. In order to minimise price risk arising from investments in mutual funds, the Company predominately invests in those mutual funds which have higher exposure to high quality debt instruments with adequate liquidity and no demonstrated track record of price volatility. Price risk sensitivity: 0.10% increase or decrease in prices will have the following impact on profit/(loss) before tax and on other components of equity
Particulars Impact on Profit: Impact on equity Increase/(Decrease) Increase/(Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Price - increase by 0.10%* 0.03 2.99 0.03 2.99 Price - decrease by 0.10%* (0.03) (2.99) (0.03) (2.99)
* assuming all other variables as constant
142 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 4.13 Related Party Disclosures A. names of related parties and related party relationship i) The company is controlled by the following entities: Entities exercising control # Reliance Industries Limited Reliance Industrial Investments and Holdings Limited* (Protector of Digital Media Distribution Trust) Digital Media Distribution Trust Jio Content Distribution Holdings Private Limited $ Jio Internet Distribution Holdings Private Limited $ Jio Cable and Broadband Holdings Private Limited $
ii) under Control of the Company 1 Wholly Owned Subsidiaries Bee Network and Communications Private Limited Binary Technology Transfers Private Limited Hathway CNet Private Limited Hathway Enjoy Cable Network Private Limited Hathway Gwalior Cable & Datacom Private Limited Hathway Internet Satellite Private Limited Hathway JMD Farukhabad Cable Network Private Limited Hathway Media Vision Private Limited Hathway Space Vision Cabletel Private Limited Hathway United Cables Private Limited Ideal Cables Private Limited ITV Interactive Media Private Limited Liberty Media Vision Private Limited Vision India Network Private Limited Win Cable and Datacom Private Limited Hathway Broadband Private Limited Hathway New Concept Cable & Datacom Private Limited Hathway Mantra Cable & Datacom Private Limited Hathway Software Developers Private Limited UTN Cable Communications Private Limited Hathway Mysore Cable Network Private Limited Hathway Krishna Cable Private Limited Hathway Digital Private Limited 2 Other – Subsidiaries Chennai Cable Vision Network Private Limited Channels India Network Private Limited Elite Cable Network Private Limited Hathway Nashik Cable Network Private Limited Hathway Bhawani Cabletel & Datacom Limited Hathway Kokan Crystal Cable Network Private Limited
Hathway Cable and Datacom Limited Annual Report 2019-20 143 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) iii) Other Related parties : 1 Fellow Subsidiaries # Reliance Corporate IT Park Limited^ Reliance Jio Infocomm Limited^ Reliance Retail Finance Limited^ 2 Joint Ventures Hathway Digital Saharanpur Cable & Datacom Private Limited Hathway Sai Star Cable & Datacom Private Limited Hathway MCN Private Limited Hathway Channel 5 Cable & Datacom Private Limited Net 9 Online Hathway Private Limited Hathway Cable MCN Nanded Private Limited Hathway Latur MCN Cable & Datacom Private Limited Hathway Palampur Cable Network Private Limited Hathway ICE Television Private Limited Hathway Sonali Om Crystal Cable Private Limited Hathway Dattatray Cable Network Private Limited Hathway Prime Cable & Datacom Private Limited Hathway SS Cable & Datacom - LLP 3 Joint ventures of Fellow Ryohin-Keikaku Reliance India Private Limited Subsidiaries # Reliance-Vision Express Private Limited 4 Associate Companies Pan Cable Services Private Limited Hathway VCN Cablenet Private Limited GTPL Hathway Limited (f.k.a.GTPL Hathway Private Limited) 5 Trusts - Post Employment Hathway Cable and Datacom Limited Employee Group Gratuity Benefit Trust Assurance Scheme 6 Key Management Executive Director:- Personnel Mr. Rajan Gupta - Managing Director Non Executive Directors :- Independent Directors Mr. Sridhar Gorthi Mr. Sasha Gulu Mirchandani Mr. Devendra Shrotri (upto August 4, 2019) Mr. A. Siddharth (w.e.f August 5, 2019 to September 3, 2019) Ms. Ameeta A Parpia Non Independent Directors Mr. Rajan R. Raheja (upto January 30, 2019) Mr. Viren R Raheja Mr. Akshay R Raheja Ms. Geeta Fulwadaya (w.e.f. January 30, 2019) Mr. Anuj Jain (w.e.f. March 29, 2019) Mr. Saurabh Sancheti (w.e.f. March 29, 2019) Mr. Vinayak P Aggarwal (upto January 30, 2019) # w.e.f. January 30, 2019 * Reliance Industrial Investments and Holdings Limited - Protector of Digital Media Distribution Trust is wholly owned subsidiary of Reliance Industries Limited $ Controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited - Wholly owned Subsidiary of Reliance Industries Limited, is the sole beneficiary ^ Subsidiary of Reliance Industries Limited.
144 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) B) Related Party Transactions Compensation to Key Management Personnel:- Particulars March 31, 2020 March 31, 2019 (a) Short Term employee benefits * 4.56 2.96 (b) Post employment benefits 0.13 0.08 (c) Other long term benefits - - Total Compensation 4.69 3.04
* Short Term Employee Benefits include sitting fees paid to Directors As the employment benefits such as Gratuity & Leave encashment are provided on an actuarial basis forthe Company as a whole, the amount pertaining to Key Management Personnel is not ascertainable and therefore not included above.
Nature of Transactions Name of the Party Relationship 2019-20 2018-19 Income Subscription Income Net 9 Online Hathway Private Limited Joint Venture 0.64 0.47 Others Fellow - * Subsidiaries Others Joint ventures - * of Fellow Subsidiary Consultancy Income Net 9 Online Hathway Private Limited Joint Venture 0.29 0.63 Interest on Loans Hathway Digital Private Limited Subsidiary 6.14 1.53 Others Subsidiary 0.36 0.32 Others Joint Venture 0.16 0.18 Sales of Parts and Accessories Hathway Digital Private Limited Subsidiary * 0.02 Dividend Income GTPL Hathway Limited Associate 4.20 4.20 Expenses Interest on Loans Hathway Broadband Private Limited Subsidiary 0.12 0.24 Hathway Digital Private Limited Subsidiary - 0.08 Rent Offices Akshay R Raheja Key 0.43 0.42 Management Personnel Viren R Raheja Key 0.43 0.42 Management Personnel Hathway Sai Star Cable And Datacom Private Joint Venture - 0.06 Limited Purchase of Parts and Accessories Hathway Digital Private Limited Subsidiary - 0.36 Contribution to Gratuity Fund Hathway Cable and Datacom Limited Trust 0.13 0.46 Employee Group Gratuity Assurance Scheme
Hathway Cable and Datacom Limited Annual Report 2019-20 145 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Nature of Transactions Name of the Party Relationship 2019-20 2018-19 Exceptional Item Hathway Cable MCN Nanded Private Limited Joint Venture - 0.29 Hathway Dattatray Cable Network Private Joint Venture - 0.14 Limited Hathway Sonali OM Crystal Cable Private Joint Venture - 12.99 Limited Hathway SS Cable & Datacom LLP Joint Venture - 1.94 GTPL Hathway Limited Associate - 2.50 Hathway Palampur Cable Network Private Joint Venture 0.22 - Limited Business Support Expense Reliance Industries Limited Entities 0.01 - exercising control Bandwidth and Lease Line Cost Reliance Jio Infocomm Limited Fellow 33.10 - Subsidiary Advance written off Hathway Sonali OM Crystal Cable Private Joint Venture 2.00 - Limited Acquisition of Capital assets Hathway Digital Private Limited Subsidiary 1.30 - Change in Assets / Liabilities during the year Impairment in Value of Investments Hathway Sonali OM Crystal Cable Private Joint Venture - 5.30 made during the year Limited Hathway SS Cable & Datacom LLP Joint Venture - 1.73 Hathway Palampur City Cable Network Pvt Ltd Joint Venture 0.68 - Allowance for bad and doubtful loans GTPL Hathway Limited Associate - 2.50 made during the year Hathway Sonali OM Crystal Cable Private Joint Venture (2.00) 7.68 Limited Hathway Media Vision Private Limited Subsidiary (0.31) - Others Subsidiary (0.15) - Others Joint Venture - 0.35 Net Advances/Trade Receivables/ Hathway Sai Star Cable & Datacom Private Joint Venture - 0.21 Trade Payables Made During the Year Limited Hathway Digital Private Limited Subsidiary - 19.54 Hathway Mysore Cable Network Private Subsidiary 0.04 0.12 Limited Hathway Software Developers Private Limited Subsidiary 0.03 0.10 Hathway Krishna Cable Private Limited Subsidiary 0.10 - Hathway Broadband Private Limited Subsidiary 0.43 - Others Joint Venture 0.02 0.01 Others Subsidiary 0.04 1.27 Others Joint Venture 0.01 - of Fellow Subsidiary
146 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Nature of Transactions Name of the Party Relationship 2019-20 2018-19 Net Advances/Trade Receivables/ Reliance Jio Infocomm Limited Fellow 10.67 - Trade Payables Recovered/ Paid Subsidiary During the Year Hathway Sonali OM Crystal Cable Private Joint Venture 2.00 - Limited Hathway Bhawani Cabletel & Datacom Limited Subsidiary 0.10 0.13 Hathway Latur MCN Cable & Datacom Private Joint Venture - 0.17 Limited GTPL Hathway Limited Associate 6.50 - Hathway SS Cable & Datacom LLP Joint Venture 0.14 0.20 Hathway Broadband Private Limited Subsidiary - 0.22 Hathway Cable MCN Nanded Private Limited Joint Venture 0.02 0.29 Others Subsidiary 0.06 - Others Joint Venture 1.27 0.02 Loan Received Hathway Digital Private Limited Subsidiary - 20.00 Loan repaid Hathway Digital Private Limited Subsidiary - 20.00 Hathway Broadband Private Limited Subsidiary 2.40 Receipt of repayment of Loan Hathway Digital Private Limited Subsidiary 61.99 - Investment made during the year Hathway Sai Star Cable & Datacom Private Joint Venture 0.70 - Limited Equity shares issued during the year Jio Content Distribution Holdings Private Entity exercising - 1,729.75 Limited control Jio Internet Distribution Holdings Private Entity exercising - 693.25 Limited control Jio Cable and Broadband Holdings Private Entity exercising - 517.00 Limited control
Nature Name of the Party Relationship As at As at March March 31, 2020 31, 2019 Closing Balances Equity Share Capital Jio Content Distribution Holdings Private Entity exercising 1,729.75 1,729.75 (incl. Securities Premium) Limited control Jio Internet Distribution Holdings Private Entity exercising 693.25 693.25 Limited control Jio Cable and Broadband Holdings Private Entity exercising 517.00 517.00 Limited control Investments Hathway Digital Private Limited Subsidiary 493.97 493.97 GTPL Hathway Limited Associate 168.75 168.75 Others Subsidiary 82.31 82.31 Others Associate 0.10 0.10 Others Joint Venture 70.45 69.74 Loans & advances Hathway Digital Private Limited Subsidiary - 61.99 Win Cable & Datacom Private Limited Subsidiary 20.22 20.22 Hathway Sonali OM Crystal Cable Private Joint Venture 13.48 15.48 Limited
Hathway Cable and Datacom Limited Annual Report 2019-20 147 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Nature Name of the Party Relationship As at As at March March 31, 2020 31, 2019 Hathway Nashik Cable Network Private Subsidiary 10.39 10.39 Limited Others Subsidiary 33.95 33.53 Others Associate 2.90 9.40 Others Joint Venture 2.69 3.70 Others Trust 0.01 0.01 Impairment in Value of Hathway Media Vision Private Limited Subsidiary 5.92 5.92 Investments Hathway Channel 5 Cable & Datacom Private Joint Venture 6.28 6.28 Limited Hathway Sai Star Cable & Datacom Private Joint Venture 16.68 16.68
Limited
Hathway Sonali OM Crystal Cable Private Joint Venture 16.37 16.37
Limited Others Subsidiary 11.10 11.10 Others Associate 0.10 0.10 Others Joint Venture 6.02 5.34 Allowance for bad and doubtful loans Hathway Nashik Cable Network Private Subsidiary 10.39 10.39 Limited Win Cable & Datacom Private Limited Subsidiary 20.22 20.37 Hathway Sonali OM Crystal Cable Private Joint Venture 13.45 15.45 Limited Others Subsidiary 11.53 11.99 Others Associate 2.50 2.50 Others Joint Venture 1.42 1.42 Other Financial Liabilities Hathway SS Cable & Datacom LLP Joint Venture 2.94 2.80 Trade Payables Hathway Broadband Private Limited Subsidiary - 0.43 Hathway Krishna Cable Private Limited Subsidiary - 0.10 Reliance Jio Infocomm Limited Fellow 10.67 - Subsidiary Unsecured loan Hathway Broadband Private Limited Subsidiary - 2.40 Trade Receivables Hathway Bhawani Cabletel & Datacom Limited Subsidiary 0.25 0.35 Hathway Mysore Cable Network Private Subsidiary - 0.23 Limited Hathway Software Developers Private Limited Subsidiary - 0.20 Hathway Sai Star Cable & Datacom Private Joint Venture - 0.30 Limited Hathway Kokan Crystal Cable Network Private Subsidiary 0.11 - Limited Net 9 Online Hathway Private Limited Joint Venture 0.28 0.27 Others Subsidiary 0.07 0.13 Others Joint Venture 0.04 0.02 Others Fellow - * Subsidiaries Others Joint Venture - 0.01 of Fellow Subsidiary * Amount less than ` 50,000 The Company has extended aggregate loan of ` 101.10 to various subsidiaries, joint ventures and associates, out of which ` 21.24 is interest free. The Company had invested in 5% Non cumulative Redeemable Preference shares issued by Hathway Digital Private Limited aggregating to ` 0.05 (March 31, 2019 : ` 0.05). The Company has given Corporate financial Guarantees of ` 20.00 (March 31, 2019 ` 39.69) on behalf of GTPL Hathway Limited, ` 1,038.94 (March 31, 2019: ` 975.86) on behalf of Hathway Digital Private Limited. The Company has given Letter of Comfort of ` 7.46 (March 31, 2019 ` 58.07) to Banks towards various credit facilities extended by them to GTPL Hathway Limited.
148 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) 4.14 Supplementary statutory information required to be given pursuant to Schedule V of regulation 34(3) and 53(f) of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 Loans And Advances In The Nature of Loans To Subsidiaries, Joint Ventures And Associates
Name of Related Party As at March 31, 2020 As at March 31, 2019 Subsidiaries Associates Maximum Subsidiaries Associates Maximum and Joint Amount and Joint Amount Ventures Outstanding Ventures Outstanding During the year During the year Hathway Mysore Cable 4.53 - 4.53 4.30 - 4.30 Network Pvt. Ltd. Hathway Software 3.08 - 3.08 2.88 - 2.88 Developers Pvt. Ltd. Hathway Media Vision 1.64 - 1.64 1.64 - 1.64 Pvt. Ltd. UTN Cable 6.11 - 6.11 6.11 - 6.11 Communications Pvt. Ltd. Hathway Ice Television - 0.68 0.68 - 0.68 0.68 Pvt. Ltd. GTPL Hathway Ltd. (f.k.a - 2.90 9.40 - 9.40 10.32 GTPL Hathway Pvt. Ltd) Net 9 Online Hathway - 0.20 0.20 - 0.20 0.20 Pvt. Ltd. Hathway Sonali Om - 13.48 15.48 - 15.48 15.48 Crystal Cable Pvt. Ltd. Hathway Gwalior Cable 0.51 - 0.51 0.51 - 0.51 & Datacom Pvt. Ltd. Hathway Enjoy Cable * - * * - * Network Pvt. Ltd. Hathway Digital - 1.04 1.04 - 1.04 1.04 Saharanpur Cable & Datacom Pvt. Ltd. Hathway JMD * - * * - * Farukhabad Cable Network Pvt. Ltd. Hathway Dattatray Cable - - 0.14 - 0.14 0.14 Network Pvt. Ltd. Hathway Mantra Cable & 7.50 - 7.50 7.50 - 7.50 Datacom Pvt. Ltd. Hathway Digital Pvt Ltd. - - 61.99 61.99 - 61.99 Hathway Prime Cable & - 0.02 0.02 - 0.02 0.02 Datacom Pvt. Ltd.
Hathway Cable and Datacom Limited Annual Report 2019-20 149 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated)
Name of Related Party As at March 31, 2020 As at March 31, 2019 Subsidiaries Associates Maximum Subsidiaries Associates Maximum and Joint Amount and Joint Amount Ventures Outstanding Ventures Outstanding During the year During the year Hathway Kokan Crystal 1.20 - 1.21 1.21 - 1.21 Cable Network Pvt. Ltd. Bee Network & 0.37 - 0.37 0.37 - 0.37 Communications Pvt. Ltd. Binary Technology 1.63 - 1.63 1.63 - 1.63 Transfers Pvt. Ltd. Chennai Cable Vision 1.97 - 1.97 1.97 - 1.97 Network Pvt. Ltd. Channels India Network 0.01 - 0.01 0.01 - 0.01 Pvt. Ltd. Elite Cable Network Pvt. 0.02 - 0.02 0.02 - 0.02 Ltd. Hathway C Net Pvt. Ltd. 0.45 - 0.45 0.45 - 0.45 Hathway Internet & 1.63 - 1.63 1.63 - 1.63 Satellite Pvt. Ltd. Hathway Nashik Cable 10.39 - 10.39 10.39 - 10.39 Network Pvt. Ltd. Hathway Space Vision 1.04 - 1.04 1.04 - 1.04 Cabletel Pvt. Ltd. Ideal Cables Pvt. Ltd. 0.41 - 0.41 0.41 - 0.41 ITV Interactive Media 0.45 - 0.45 0.45 - 0.45 Pvt. Ltd. Liberty Media Vision Pvt. 1.17 - 1.17 1.17 - 1.17 Ltd. Vision India Network Pvt. 0.22 - 0.22 0.22 - 0.22 Ltd. Win Cable & Datacom 20.22 - 20.22 20.22 - 20.22 Pvt. Ltd. Hathway Sai Star Cable - 0.54 1.40 - 1.40 1.40 & Datacom Pvt. Ltd. Hathway SS Cable & - 0.21 0.21 - 0.21 0.21 Datacom LLP
* Amount less than ` 50,000
Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan. (a) None of the loanee has made, per se, investment in the shares of the Company. (b) Investment made by Hathway Media Vision Pvt. Ltd in Hathway Bhawani Cabletel & Datacom Ltd - 21,60,000 equity shares of ` 2.46 .
150 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) (c) Investment made by Hathway New Concept Cable & Datacom Pvt Ltd in Hathway Media Vision Private Limited - 2,000 preference shares of ` 0.00* (d) Investment made by Hathway New Concept Cable & Datacom Pvt Ltd in Win Cable & Datacom Private Limited - 5,000 preference shares. of ` 0.01
* Amount less than ` 50,000
4.15 The Operation of the Company are classified as 'infrastructure facilities' as defined under Schedule VI of the Act. Accordingly the disclosure requirements specified in sub section 4 of section 186 of the Act in respect of loan given or guarantee given or security provided and the related disclosure on purposes/ utilization by recipient companies, are not applicable to the Company except details of Investment made during the year 2019-20 as per section 186(4) of the Act. The Company has made Investment in following body corporate during the year: Hathway Sai Star Cable & Datacom Private Limited - 13,610 Equity Shares amounting to ` 0.70 During the financial year 2018-19, the Company had not made any investment in terms of Section 186 (4) oftheAct. Accordingly, comparatives disclosure is not given.
4.16 Revenue from contracts with customers Disaggregation Of Revenue As the Company's business activity falls within a single business segment in terms of Ind AS 108 on Operating Segments, the financial statement are reflective of the information required by Ind AS 108. The nature, amount, timing and uncertainty of revenue and cash flows are similar across company’s revenue from contracts with customers. Accordingly, there is no disaggregation of revenue disclosed.
Contract Balances The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Trade receivable and unbilled revenues are presented net of impairment in the Balance Sheet.
The following table provides information about receivables, contract assets and contract liabilities for the contracts with the customers.
Particulars March 31, 2020 March 31, 2019 Receivables, which are included in 'Trade and other receivables' 0.21 6.50 Contract assets (Unbilled Revenue) - - Contract liabilities (Unearned Revenue) 76.01 72.42
The contract assets primarily relate to the Company's rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. The contract liabilities primarily relate to the billing recognized in advance where performance obligations are yet to be satisfied.
Hathway Cable and Datacom Limited Annual Report 2019-20 151 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
NoNotestes toto tthehe StStaandalone FiFinancial StStatemeatementntss FORFOR THE YYEAREAR ENDEDENDED MARCHMARCH 31, 2020 (` in Crores unless otherwise stated) Significant changes in the contract assets and the contract liabilities balances during the year are as follows.
Particulars March 31, 2020 March 31, 2019 Contract Contract Contract Contract assets liabilities assets liabilities Balance at the beginning of the year - 72.42 - 80.87 Add: Advance Income received from the - 76.01 - 72.42 customer during the year Less: Revenue recognised that is included - 72.42 - 80.87 in the contract liability balance at the beginning of the year Balance at the end of the year - 76.01 - 72.42
Performance Obligations and Remaining Performance Obligations The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performances as the performance obligations relates to contracts that have an original expected duration of one year or less.
Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
Contract costs The Company incurred cost of ` 36.94 (March 31, 2019 : ` 36.96) as a result of obtaining customers. The Company has therefore capitalised them as customer acquisition cost.
Customer acquisition cost are amortised over a period of five years.
4.17 Subsequent to the outbreak of Coronavirus (COVID -19) and consequential lock down across the country, the Company has continued to operate and provide internet services to its customers, which has been declared as an essential service, without any disruptions. However, disruptions to businesses worldwide and economic slowdown may have its eventual impact on the Company. A definitive assessment of the impact is not possible in view of the highly uncertain economic environment and the scenario is still evolving. The Company has evaluated its liquidity position and of recoverability and carrying values of its assets and have concluded that no material adjustments required at this stage in the standalone financial statements. 4.18 The Board of Directors of the Company at its meeting held on February 17, 2020, has approved a Composite Scheme of Amalgamation and Arrangement involving the Company (Hathway), Den Networks Limited (Den), Network18 Media & Investments Limited (Network18), TV18 Broadcast Limited (TV18), Media18 Distribution Services Limited (Cable Co.), Web18 Digital Services Limited (ISP Co.) and Digital18 Media Limited (Digital Co.) and their respective shareholders and creditors (“Scheme”). The Scheme provides for amalgamation of Hathway, Den and TV18 with Network 18 and subsequent consolidation of Cable, ISP and Digital businesses of the amalgamating companies by way of transfer of relevant
152 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NotesNotes toto thethe SSttaandalone FiFinancial SSttatemeatemennttss FFOROR THE YYEAREAR EENDEDNDED MAMARCHRCH 31, 2020 (` in Crores unless otherwise stated) undertakings to the respective companies. On amalgamation, the shareholders of Hathway will be issued shares of Network 18. The appointed date of the Scheme is February 1, 2020, however, it will take effect upon receipt of requisite approvals and fulfilment of conditions stated in the Scheme. Pending the Scheme coming into force, no effect of the same have been considered in this standalone financial statements. 4.19 The Company has exposure by way of investments and receivables in case of certain subsidiaries and joint ventures aggregating to ` 68.01 (net of provision) as at March 31, 2020. The net worth of such subsidiaries and joint ventures have been fully / substantially eroded. However, most of these companies have demonstrated profitability in their operations for the year ended March 31, 2020. Based on the projections, management of the Company expects that these companies will continue to have positive cash flow to adequately sustain their operations in foreseeable future and therefore, no further provision for impairment in investment and receivable is considered necessary. 4.20 Previous year's figures have been reclassified / regrouped, wherever necessary.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
Hathway Cable and Datacom Limited Annual Report 2019-20 153 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Independent Auditor’s Report To the Members of Hathway Cable and Datacom Limited
Report on the audit of the Consolidated Financial ethical responsibilities in accordance with these requirements Statements and Code of Ethics issued by ICAI. We believe that the audit evidence we have obtained and the audit evidence obtained Opinion by the other auditors in terms of their reports referred to in We have audited the accompanying consolidated financial the Other Matters section below is sufficient and appropriate statements of Hathway Cable and Datacom Limited to provide a basis for our audit opinion on the consolidated (hereinafter referred to as “the Holding Company”) and its financial statements. subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associates and its joint ventures Emphasis of Matter comprising of the Consolidated Balance Sheet as at March 31, We draw attention to Note no 4.19, in which it is stated that 2020, the Consolidated Statement of Profit and Loss (including the Board of directors of the Holding Company has approved Other Comprehensive Income), the Consolidated Statement of a Composite Scheme of Amalgamation and Arrangement Changes in Equity and the Consolidated Cash Flow Statement involving the Holding Company (Hathway), Den Networks for the year then ended, and a summary of significant accounting Limited (Den), Network 18 Media & Investments Limited policies and other explanatory information. (hereinafter referred (Network18), TV18 Broadcast Limited (TV18), Media 18 to as ‘the consolidated financial statements’). Distribution Services Limited (Cable Co.), Web18 Digital In our opinion and to the best of our information and according Services Limited (ISP Co.) and Digital l8 Media Limited to the explanations given to us and based on the consideration (Digital Co.) and their respective shareholders and creditors of the reports of the other auditors on standalone / consolidated (“Scheme”). The Scheme provides for amalgamation of the financial statements and on the other financial information of the Hathway, Den and TV 18 with Network 18 and subsequent subsidiaries, the aforesaid consolidated financial statements consolidation of Cable, ISP and Digital businesses of the give the information required by the Companies Act, 2013 (“the amalgamating companies by way of transfer of relevant Act”) in the manner so required and give a true and fair view undertakings to the respective companies. On amalgamation, in conformity with the Indian Accounting Standards prescribed the shareholders of Hathway will be issued shares of Network under section 133 of the Act read with the Companies (Indian 18. The appointed date of the Scheme is February 01, 2020, Accounting Standards) Rules, 2015, as amended, (“Ind AS”) however, it will take effect upon receipt of requisite approvals and other accounting principles generally accepted in India, of and fulfilment of conditions stated in the Scheme. Pending the consolidated state of affairs of the Company as at March the Scheme coming in to force, no effect of the same have 31, 2020, its consolidated profit (including other comprehensive been considered in this consolidated financial statements. income), consolidated changes in equity and its consolidated Our opinion is not modified in respect of this matter. cash flows for the year ended on that date. Key Audit Matters Basis for Opinion Key audit matters are those matters that, in our professional We conducted our audit of the consolidated financial judgement and based on the consideration of the reports of the statements in accordance with the Standards on Auditing (SAs) other auditors on standalone financial statements/ consolidated specified under section 143(10) of the Act. Our responsibilities financial statements and on the other financial information of under those Standards are further described in the Auditor’s the subsidiaries, associates and joint ventures, were of most Responsibilities for the Audit of the Consolidated Financial significance in our audit of the consolidated financial statements Statements section of our report. We are independent of the of the current period. These matters were addressed in the Group in accordance with the Code of Ethics issued by Institute context of our audit of the consolidated financial statements of Chartered Accountants of India (ICAI), together with the as a whole, and in forming our opinion thereon, and we do independence requirements that are relevant to our audit of the not provide a separate opinion on these matters. We have consolidated financial statements under the provisions of the determined the matters described below to be the key audit Act and rules made there under and we have fulfilled our other matters to be communicated in our report.
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Sr. Key Audit Matters How our audit addressed the Key Audit Matters No 1. Valuation and Disclosure of Deferred Tax Assets Our procedures included, amongst others: The Group has a significant amount of deferred tax assets, We tested Group’s assumptions used to determine that mainly resulting from unused tax losses and unabsorbed there is reasonable certainty that deferred tax assets depreciation allowance. The accounting for deferred tax recognized in the balance sheet will be realized. This is assets is significant to our audit since the Group makes based upon forecasted taxable income and the periods judgements and estimates of forecasted taxable income in when the deferred tax assets can be utilized. In this relation to the realization of deferred tax assets. regards, we also considered recent changes in the Income As at March 31, 2020, the deferred tax assets are valued at tax laws and decisions taken by the management pursuant `436.83 crores. Further reference is made to Note 2.06 to such changes. The forecasts were evaluated by us considering especially the performance of the Group post capital infusion, related business plans approved by the Management and regulatory changes. Such evaluation included obtaining an understanding of management’s planned strategies around business expansion, revenue stream growth strategies. Our audit procedure also included obtaining representation from the management and auditor of the material subsidiary with particular focus on those related to calculation and recognition of deferred tax asset. We also assessed the adequacy of the Group’s disclosures included in Note 2.06 2. Impairment of Trade Receivables Our procedures included, amongst others: Refer to Note 2.10 on Trade receivables and Note 4.08 for We assessed the Group’s processes and controls relating disclosures on the trade receivables and the related risks to the monitoring of trade receivables and considered such as credit risk. ageing to identify collection risks. We obtained evidence of The Group’s major revenue streams arises from services receipts subsequent to the year end from the customers. provided to end use customers in the form of monthly We assessed management’s assumptions used to subscription income and receivables from broadcasters for calculate the impairment loss on trade receivables, marketing and promotional income and incentives. The trade through analyses of ageing of receivables, assessment receivables on account of subscription income are typically of significant overdue trade receivables. We assessed the un-secured and derived from sales made to large number overall reasonableness of the allowance for doubtful debts of independent customers. In case of receivables from the by comparing the actual loss trends across periods against marketing and promotional income and incentives, the the allowance rate applied. management reviews the credit-worthiness of the broadcasters Our audit procedure also included obtaining representation based on their financial position, past experience and other from the management and auditor of the material subsidiary factors. Trade receivables amounted to `563.24 crores as at relating to their evaluation and assessment of the March 31, 2020. assumptions adopted in impairment of trade receivables. The collectability of trade receivables from subscribers and We assessed the adequacy of the disclosures on the trade broadcasters is a key element of the Group’s working capital receivables and the related risks such as credit risk in management. The Group follows a simplified approach Note 4.08 (i.e. based on lifetime Expected Credit Loss model (ECL)) for recognition of impairment loss allowance on Trade receivables. For the purpose of measuring the lifetime ECL allowance for trade receivables, the Group uses a provision matrix which comprise a very large number of small balances grouped into homogenous groups and assessed for impairment collectively. In addition, in case there are events or changes in circumstances indicating individual or class of trade receivables is required to be reviewed on qualitative aspects, necessary provisions are made.
Hathway Cable and Datacom Limited Annual Report 2019-20 155 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Sr. Key Audit Matters How our audit addressed the Key Audit Matters No 3. Impairment of Property, Plant and Equipment Our procedures included, amongst others: There is a risk of impairment on the Group’s property, plant We assessed the determination of the recoverable amount and equipment (“PPE”) due to the nature of its PPE and the of the PPE based on our understanding of the nature of the business environment surrounding the PPE. As on March Group’s business and the economic environment in which 31, 2020, the carrying amount of PPE was `1,359.65 crores its PPE operate. which represent 21.34% of total assets. The management We reviewed the Group’s historical performances and determines at the end of each reporting period the existence held discussions with management to understand their of any objective evidence that the Group’s property, plant assessment of the Group’s future performance. This and equipment may be impaired. If there are indicators of included obtaining an understanding of management’s impairment, the deficit between the recoverable amount of planned strategies around business expansion, revenue the property, plant and equipment and its carrying amount stream growth strategies and cost initiatives. We assessed would be recognised as impairment loss in Statement of Profit management’s estimates applied in the value-in-use and Loss. model based on our knowledge of the Group’s operations, The process of identifying indicators of impairment and and compared them against historical forecasts and determining the recoverable amount of the PPE by performance and tested the mathematical accuracy of the management requires significant judgement and estimation. value-in-use model. We evaluated the sensitivity of the The determination of the recoverable amounts requires outcomes by considering the downside scenarios against estimates of forecasted revenues, growth rates, profit changes to the key assumptions. margins, tax rates and discount rates. Our audit procedure also included obtaining representation As determined by the management, the carrying amount from the management and auditor of the material of PPE was impaired by `97.74 crores in the current year, subsidiary relating to their evaluation and assessment of as disclosed in Note 3.06 to the consolidated financial the assumptions adopted in impairment of PPE. We also statements. assessed the adequacy of the related disclosures in the notes to the consolidated financial statements. 4. Impairment of carrying cost of investments and net Our procedures included, amongst others: receivables from associates and joint ventures We have reviewed and considered management’s Refer to Notes 1.05, 1.08 and 1.12 for the relevant assessment on the net assets or liabilities of these entities. accounting policy and the critical judgements, assumptions We have also assessed management’s basis to determine and estimation uncertainties used in impairment assessment potential impairment in both financial and non-financial of cost of investments in joint ventures and associates and assets of these entities. We also had discussions with net receivables due from such entities at the reporting year management on the prospects and future plans of these end. Refer to Notes 4.10 and 4.09 for the investment in joint entities. We have reviewed the valuation reports of key ventures and associates and amount due from such entities components carried out by the independent valuers and respectively. considered the appropriateness of the key assumptions Total carrying cost of investment in joint ventures and used in the valuation for impairment assessment of associates amounted to `673.10 crores and amount due from investments in key components. joint ventures and associates amounted to `43.32 crores. As Our audit procedure also included obtaining representation these balances are significant, they are a key focus area for from the management and auditor of the material our audit. subsidiary relating to their evaluation and assessment on For the non-performing joint ventures and associates or if the net assets or liabilities of these entities, management’s they have significant negative equity balances, the Group will basis to determine potential impairment in both financial have exposure to loss on cost of investments in joint ventures and non-financial assets of these entities and prospects and associates and amount due from such entities. Any and future plans of these entities. impairment losses on the investments in joint ventures and We have also assessed the adequacy of the disclosures associates and the related receivables from these entities made in the consolidated financial statements. have to be recognised in the Group’s financial statements. Management made a comparison of carrying values of the joint ventures and associates with the Group’s share of net assets or liabilities of the joint ventures and associates to identify indications of impairment loss on these investments and receivables due from them. A total exposure of `716.42 crores was considered. This amount comprised `7.26 crores impairment of investment in joint ventures and associates and `47.79 crores impairment of net receivables from joint ventures and associates. The total impairment loss allowance for the year was `55.05 crores.
156 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Information Other than the Consolidated Financial In preparing the consolidated financial statements, the Statements and Auditor’s Report Thereon respective Board of Directors of the companies included in the The Holding Company’s Board of Directors is responsible for the Group and of its associates and joint ventures are responsible other information. The other information comprises the information for assessing the ability of the Group and of its associates and included in Annual report but does not include the consolidated joint ventures to continue as a going concern, disclosing, as financial statements and our auditor’s report thereon. applicable, matters related to going concern and using the going concern basis of accounting unless respective Board of Our opinion on the consolidated financial statements does not Directors either intends to liquidate the company or to cease cover the other information and we do not express any form of operations, or has no realistic alternative but to do so. assurance conclusion thereon. The respective Board of Directors of the companies included In connection with our audit of the consolidated financial in the Group and of its associates and joint ventures are statements, our responsibility is to read the other information responsible for overseeing the financial reporting process of and, in doing so, consider whether the other information the Group and of its associates and joint ventures. is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise Auditor’s Responsibilities for the Audit of the appears to be materially misstated. Consolidated Financial Statements Our objectives are to obtain reasonable assurance about If, based on the work we have performed, we conclude that whether the consolidated financial statements as a whole there is a material misstatement of this other information, we are free from material misstatement, whether due to fraud are required to report that fact. We have nothing to report in or error, and to issue an auditor’s report that includes our this regard. opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance Responsibilities of Management and Those with SAs will always detect a material misstatement when it Charged with Governance for the Consolidated exists. Misstatements can arise from fraud or error and are Financial Statements considered material if, individually or in the aggregate, they The Holding Company’s Board of Directors is responsible for could reasonably be expected to influence the economic the matters stated in section 134(5) of the Act with respect decisions of users taken on the basis of these consolidated to the preparation of these consolidated financial statements financial statements. that give a true and fair view of the consolidated financial position, consolidated financial performance (including other As part of an audit in accordance with SAs, we exercise comprehensive income), consolidated changes in equity and professional judgement and maintain professional skepticism consolidated cash flows of the Group including its associates and throughout the audit. We also: joint ventures in accordance with Ind AS and other accounting principles generally accepted in India. The Holding Company’s • Identify and assess the risks of material misstatement of Board of Directors is also responsible for ensuring accuracy of the consolidated financial statements, whether due to fraud records including financial information considered necessary or error, design and perform audit procedures responsive for the preparation of these consolidated financial statements. to those risks, and obtain audit evidence that is sufficient The respective Governing Bodies of the companies included and appropriate to provide a basis for our opinion. The in the Group and of its associates and joint ventures are risk of not detecting a material misstatement resulting responsible for maintenance of adequate accounting records from fraud is higher than for one resulting from error, as in accordance with the provisions of the Act for safeguarding fraud may involve collusion, forgery, intentional omissions, the assets and for preventing and detecting frauds and misrepresentations, or the override of internal control. other irregularities; selection and application of appropriate • Obtain an understanding of internal control relevant to accounting policies; making judgements and estimates that are the audit in order to design audit procedures that are reasonable and prudent; and the design, implementation and appropriate in the circumstances. Under section 143(3) maintenance of adequate internal financial controls, that were (i) of the Act, we are also responsible for expressing our operating effectively for ensuring accuracy and completeness opinion on whether the company has adequate internal of the accounting records, relevant to the preparation and financial controls system in place and the operating presentation of the financial statements that give a true and effectiveness of such controls. fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose • Evaluate the appropriateness of accounting policies of preparation of the consolidated financial statements by the used and the reasonableness of accounting estimates Directors of the Holding Company, as aforesaid. and related disclosures made by management.
Hathway Cable and Datacom Limited Annual Report 2019-20 157 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
• Conclude on the appropriateness of management’s use the consolidated financial statements of which we are the of the going concern basis of accounting and, based independent auditors regarding, among other matters, the on the audit evidence obtained, whether a material planned scope and timing of the audit and significant audit uncertainty exists related to events or conditions that findings, including any significant deficiencies in internal control may cast significant doubt on the ability of the Group and that we identify during our audit. its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, We also provide those charged with governance with a statement we are required to draw attention in our auditor’s report that we have complied with relevant ethical requirements to the related disclosures in the consolidated financial regarding independence, and to communicate with them all statements or, if such disclosures are inadequate, to relationships and other matters that may reasonably be thought modify our opinion. Our conclusions are based on the to bear on our independence, and where applicable, related audit evidence obtained up to the date of our auditor’s safeguards. report. However, future events or conditions may cause the Group and its associates and joint ventures to cease From the matters communicated with those charged with to continue as a going concern. governance, we determine those matters that were of most significance in the audit of the consolidated financial statements • Evaluate the overall presentation, structure and content of the current period and are therefore the key audit matters. of the consolidated financial statements, including the We describe these matters in our auditor’s report unless law or disclosures, and whether the consolidated financial regulation precludes public disclosure about the matter or when, statements represent the underlying transactions and in extremely rare circumstances, we determine that a matter events in a manner that achieves fair presentation. should not be communicated in our report because the adverse • Obtain sufficient appropriate audit evidence regarding consequences of doing so would reasonably be expected to the financial information of the entities or business outweigh the public interest benefits of such communication. activities within the Group and its associates and joint ventures to express an opinion on the consolidated Other Matters financial statements. We are responsible for the (i) We did not audit (a) the audited standalone financial direction, supervision and performance of the audit of statements of 27 subsidiaries, whose standalone financial the financial statements of such entities included in the statements reflect total assets of` 43.37 crores as at March consolidated financial statements of which we are the 31, 2020, total revenues of `64.75 crores, Group’s share independent auditors. For the other entities included of total net loss after tax of `8.79 and net cash inflows in the consolidated financial statements, which have amounting to `2.30 crores for the year ended on that date, been audited by other auditors, such other auditors as considered in the consolidated financial statements; remain responsible for the direction, supervision and (b) the audited consolidated financial statements of performance of the audits carried out by them. We 1 subsidiary, whose consolidated financial statement remain solely responsible for our audit opinion. Our reflects total assets of `1,267.99 crores as at March 31, responsibilities in this regard are further described in 2020, total revenues of `1,180.85 crores, Group’s share “Other Matters” paragraph below. of total net profit after tax of `66.81 crores and net cash We believe that the audit evidence obtained by us along with outflows amounting to `12.98 crores for the year ended the consideration of the audit report of the other auditors on that date, as considered in the consolidated financial referred to in “Other Matters” paragraph below, is sufficient statements; (c) the audited consolidated financial and appropriate to provide a basis for our audit opinion on the statements of 1 associate, whose consolidated financial consolidated financial statements. statements include the Group’s share of net profit after tax of `28.75 crores for the year ended March 31, 2020; and Materiality is the magnitude of misstatements in the consolidated (d) the audited standalone financial statements of 12 joint financial statements that, individually or in aggregate, makes ventures and 2 associates, whose standalone financial it probable that the economic decisions of a reasonably statements include the Group’s share of net profit of knowledgeable user of the consolidated financial statements `1.30 crores for the year ended on March 31, 2020. may be influenced. We consider quantitative materiality and These financial statements and other financial information qualitative factors in (i) planning the scope of our audit work have been audited by other auditors whose reports have and in evaluating the results of our work; and (ii) to evaluate been furnished to us by the Management of the Company the effect of any identified misstatements in the consolidated and our opinion on the consolidated financial statements, financial statements. to the extent they have been derived from such financial We communicate with those charged with governance of statements is based solely on the reports of such other the Holding Company and such other entities included in auditors.
158 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
(ii) Apart from above, as stated in Note 4.18 of the incorporated in India, none of the directors of the Group, consolidated financial statements, the consolidated its associates and joint ventures incorporated in India is financial statements also include Group’s share of total disqualified as on March 31, 2020 from being appointed net profit after tax of `1.10 crores for the year ended as a director in terms of section 164 (2) of the Act; March 31, 2020 in respect of one joint venture. The f. With respect to the adequacy of the internal financial standalone financial statements and financial information controls with reference to financial statements of the of the joint venture have been furnished to us by the Holding Company, its subsidiaries, associates and Management of the Holding Company and our opinion joint ventures incorporated in India and the operating on the consolidated financial statements, so far as it effectiveness of such controls, refer to our separate relates to the amounts and disclosure included in respect report in ‘Annexure A’; of this joint venture is based solely on such unaudited standalone financial statements/ financial information. g. With respect to the other matters to be included in the According to the information and explanations given to Auditor’s Report in accordance with the requirements of us by the Management of the Holding Company, such section 197(16) of the Act, as amended: standalone financial statements of the joint venture is In our opinion and to the best of our information not material to the group. and according to the explanations given to us, the Our opinion on the consolidated financial statements, and our remuneration paid by the Holding Company to its report on Other Legal and Regulatory Requirements below, is directors during the year is in accordance with the not modified in respect of the above matters with respect to our provisions of section 197 of the Act; and reliance on the work done and the reports of the other auditors. h. With respect to the other matters to be included in Report on Other Legal and Regulatory the Auditor’s Report in accordance with Rule 11 of Requirements the Companies (Audit and Auditors) Rules, 2014, as As required by section 143(3) of the Act, we report, to the amended, in our opinion and to the best of our information extent applicable, that: and according to the explanations given to us and based on the consideration of the report of other auditors of a. We have sought and obtained all the information and subsidiaries, associates and joint ventures, as noted in explanations which to the best of our knowledge and the Other matters paragraph: belief were necessary for the purposes of our audit of i. The consolidated financial statements disclose the the aforesaid consolidated financial statements; impact of pending litigations on the consolidated b. In our opinion, proper books of account as required by financial position of the Group, its associates and law relating to preparation of the aforesaid consolidated joint ventures. Refer Note 4.03(n) and 4.10 to the financial statements have been kept so far as it appears consolidated financial statements; from our examination of those books and the reports of ii. The Group, its associates and joint ventures have the other auditors; made provision, as required under the applicable c. The Consolidated Balance Sheet, the Consolidated law or accounting standards, for material Statement of Profit and Loss (including Other foreseeable losses, if any, on long-term contracts Comprehensive Income), the Consolidated Statement including derivative contracts.- Refer Note 4.03(o) of Changes in Equity and the Consolidated Cash Flow to the consolidated financial statements ; and Statement dealt with by this Report are in agreement iii. There has been no delay in transferring amounts with the relevant books of account maintained for the which were required to be transferred to the purpose of preparation of the consolidated financial Investor Education and Protection Fund by the statements; Group, its associates and joint ventures. d. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under For Nayan Parikh & Co. section 133 of the Act, read with relevant rules issued Chartered Accountants thereunder and relevant provisions of the Act; Firm Registration No. 107023W e. On the basis of the written representations received from the directors of the Holding Company as on March K.Y. Narayana 31, 2020 taken on record by the Board of Directors of Partner the Holding Company and the reports of the statutory Place : Mumbai Membership No. 060639 auditors of its subsidiaries, associates and joint ventures Date : April 23, 2020 UDIN: 20060639AAAADF4420
Hathway Cable and Datacom Limited Annual Report 2019-20 159 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Annexure A to the Independent Auditor’s Report Referred to in paragraph (f) under “Report on Other Legal and Regulatory Requirements” of our Independent Auditor’s Report on even date to the members of Hathway Cable and Datacom Limited (“the Holding Company) on the consolidated financial statements for the year ended March 31, 2020:
Opinion Guidance Note and the Standards on Auditing, specified under In conjunction with our audit of the consolidated financial section 143(10) of the Act, to the extent applicable to an audit statements of the Holding Company as of and for the year of internal financial controls, both issued by the ICAI. Those ended March 31, 2020, we have audited the internal financial Standards and the Guidance Note require that we comply controls with reference to financial statements of Hathway with ethical requirements and plan and perform the audit to Cable and Datacom Limited (hereinafter referred to as ‘the obtain reasonable assurance about whether adequate internal Holding Company’) and its subsidiaries, its associates and financial controls with reference to financial statements was joint ventures , which are companies incorporated in India, as established and maintained and if such controls operated of that date. effectively in all material respects.
In our opinion, the Holding Company, its subsidiaries, Our audit involves performing procedures to obtain audit its associates and joint ventures, which are companies evidence about the adequacy of the internal financial controls incorporated in India, have, in all material respects, an system with reference to financial statements and their adequate internal financial controls system with reference to operating effectiveness. Our audit of internal financial controls financial statements and such internal financial controls with with reference to financial statements included obtaining an reference to financial statements were operating effectively as understanding of internal financial controls with reference at March 31, 2020 based on the internal controls with reference to financial statements, assessing the risk that a material to financial statements criteria established by the Holding weakness exists, and testing and evaluating the design Company, considering the essential components of internal and operating effectiveness of internal controls based on controls stated in the Guidance Note issued by the ICAI. the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of Management’s Responsibility for Internal Financial material misstatement of the financial statements, whether due Controls to fraud or error. The respective Board of Directors of the Holding company, its subsidiaries, its associates and joint ventures, which We believe that the audit evidence we have obtained and are companies incorporated in India, are responsible for the audit evidence obtained by the other auditor in terms of establishing and maintaining internal financial controls based their report referred to in the “Other Matters” paragraph below on the internal controls with reference to financial statements is sufficient and appropriate to provide a basis for our audit criteria established by the Holding Company, considering opinion on the Holding Company’s internal financial control the essential components of internal controls stated in the system with reference to financial statements. Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“Guidance Note”) issued by the ICAI. Meaning of Internal Financial Controls with These responsibilities include the design, implementation reference to Financial Statements and maintenance of adequate internal financial controls that A company’s internal financial controls with reference were operating effectively for ensuring the orderly and efficient to financial statements is a process designed to provide conduct of its business, including adherence to respective reasonable assurance regarding the reliability of financial company’s policies, the safeguarding of its assets, the reporting and the preparation of financial statements for prevention and detection of frauds and errors, the accuracy external purposes in accordance with generally accepted and completeness of the accounting records, and the timely accounting principles. A company’s internal financial controls preparation of reliable financial information, as required under with reference to financial statements includes those policies the Act. and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the Auditor’s Responsibility transactions and dispositions of the assets of the company; (2) Our responsibility is to express an opinion on the internal provide reasonable assurance that transactions are recorded financial controls with reference to financial statement of as necessary to permit preparation of financial statements in the Holding Company, its subsidiaries, associates and joint accordance with generally accepted accounting principles and ventures, which are companies incorporated in India, based that receipts and expenditures of the company are being made on our audit. We conducted our audit in accordance with the only in accordance with authorisations of management and
160 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
directors of the company; and (3) provide reasonable assurance inadequate because of changes in conditions, or that the regarding prevention or timely detection of unauthorised degree of compliance with the policies or procedures may acquisition, use, or disposition of the company’s assets that deteriorate. could have a material effect on the financial statements. Other Matters Inherent Limitations of Internal Financial Controls Our aforesaid report under section 143(3)(i) of the Act on with reference to Financial Statements the adequacy and operating effectiveness of the internal Because of the inherent limitations of internal financial controls financial controls with reference to financial statements, with reference to financial statements, including the possibility in so far as it relates standalone financial statements of 27 of collusion or improper management override of controls, subsidiaries, consolidated financial statements of 1 subsidiary, material misstatements due to error or fraud may occur and not consolidated financial statements of 1 associate, standalone be detected. Also, projections of any evaluation of the internal financial statements of 12 joint ventures and 2 associates, financial controls with reference to financial statements to which are companies incorporated in India, is based on the future periods are subject to the risk that the internal financial corresponding reports of the auditors of such companies controls with reference to financial statements may become incorporated in India.
For Nayan Parikh & Co. Chartered Accountants Firm Registration No. 107023W
K.Y. Narayana Partner Place : Mumbai Membership No. 060639 Date : April 23, 2020 UDIN: 20060639AAAADF4420
Hathway Cable and Datacom Limited Annual Report 2019-20 161 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Consolidated Balance Sheet As at March 31, 2020 (` in Crores unless otherwise stated) Particulars Note As at As at No. March 31, 2020 March 31, 2019 ASSETS Non-current assets Property, Plant and Equipment 2.01 1,359.65 1,440.65 Capital work in progress 81.11 103.60 Goodwill 2.02 92.20 92.20 Other Intangible assets 2.02 119.29 99.12 Investment accounted using equity method 4.10 665.84 637.20 Financial Assets Investments 2.03 3.24 3.24 Loans 2.04 20.50 22.94 Other financial assets 2.05 4.55 27.81 Deferred tax assets (net) 2.06 436.83 440.82 Other Non-current assets 2.07 115.24 99.78 Total Non-current assets 2,898.45 2,967.36 Current assets Inventories 2.08 13.98 14.97 Financial Assets Investments 2.09 34.10 2,995.66 Trade receivables 2.10 29.33 120.77 Cash and cash equivalents 2.11 1,080.00 81.91 Bank balances other than Cash and cash equivalents 2.12 2,009.50 71.09 Loans 2.04 12.52 19.24 Other financial assets 2.05 151.43 12.24 Current Tax Assets (Net) 2.13 45.03 44.73 Other current assets 2.07 97.11 95.87 Total Current assets 3,473.00 3,456.48 Total Assets 6,371.45 6,423.84 EQUITY AND LIABILITIES Equity Equity Share capital 2.14 354.02 354.02 Other Equity 2.15 3,389.13 3,285.49 Equity attributable to owners of the Company 3,743.15 3,639.51 Non - controlling interests 0.90 (0.84) Total Equity 3,744.05 3,638.67 Liabilities Non-current Liabilities Financial Liabilities Borrowings 2.16 44.10 1,456.68 Other financial liabilities 2.17 14.73 14.76 Provisions 2.18 3.91 4.68 Other Non-current liabilities 2.19 38.25 89.93 Total Non-current liabilities 100.99 1,566.05 Current liabilities Financial Liabilities Borrowings 2.16 1,911.82 77.81 Trade payables total outstanding dues: - Micro enterprises and small enterprises - - - Other 231.06 259.32 Other financial liabilities 2.17 total outstanding dues: - Micro enterprises and small enterprises 0.25 - - Other 164.96 685.50 Other current liabilities 2.19 217.96 195.89 Provisions 2.18 0.36 0.60 Total current liabilities 2,526.41 1,219.12 Total Equity and Liabilities 6,371.45 6,423.84 Summary of Significant Accounting Policies 1 The accompanying notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
162 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Consolidated Statement of Profit and Loss for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Note Year ended Year ended No. March 31, 2020 March 31, 2019 INCOME Revenue from Operations 3.01 1,798.39 1,558.29 Other Income 3.02 245.75 60.91 Total Income 2,044.14 1,619.20 EXPENSES Pay channel cost 560.56 609.85 Other operational expenses 3.03 306.62 253.30 Employee Benefits Expense 3.04 94.79 82.86 Finance Cost 3.05 226.37 220.80 Depreciation, Amortization and Impairment 3.06 371.10 352.41 Other Expenses 3.07 401.09 303.50 Total Expenses 1,960.53 1,822.72 Profit / (loss) before share of profit/(loss) of associates / joint ventures and 83.61 (203.52) exceptional items Share of net profit of associates and joint ventures accounted for using the equity 32.65 6.58 method Profit / (loss) before exceptional items and tax 116.26 (196.94) Exceptional Items 3.08 6.69 429.62 Profit / (Loss) before Tax 109.57 (626.56) Tax Expense: 3.09 Current Tax 0.12 0.06 Deferred Tax 3.98 (438.95) (4.10) 438.89 Profit / (loss) for theY ear 105.47 (187.67) Other comprehensive income / (loss) Items that will not be reclassified to profit or loss Share of Other Comprehensive income /(loss) of associates and joint (0.34) 0.16 ventures accounted for using the equity method Net Gain arising on financial assets measured at FVTOCI - 1.07 Remeasurements of the post employment benefit obligations 0.26 (0.05) Income tax relating to these items 0.06 (0.04) Total other comprehensive Income / (losses) (0.02) 1.14 Total other comprehensive income / (loss) for the Year 105.45 (186.53) Profit/(Loss) for theY ear attributable to: Owners of the Parent 103.73 (187.57) Non-controlling interests 1.74 (0.10) 105.47 (187.67) Other comprehensive income / (loss) for the Year attributable to: Owners of the Parent (0.01) 1.13 Non-controlling interests (0.01) 0.01 (0.02) 1.14 Total comprehensive income / (loss) for the Year attributable to: Owners of the Parent 103.72 (186.44) Non-controlling interests 1.73 (0.09) 105.45 (186.53) Earnings / (Loss) per equity share (Face value of ` 2/- each) (Refer Note 4.01): Basic and diluted (in ` ) 0.59 (1.90) Summary of Significant Accounting Policies 1 The accompanying notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
Hathway Cable and Datacom Limited Annual Report 2019-20 163 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Consolidated Statement of Changes in Equity for the year ended March 31, 2020 (` in Crores unless otherwise stated) A. Equity Share Capital Particulars Note No. Amount Balance at April 01, 2018 2.14 166.10 Changes in Equity Share Capital during the year 187.92 Balance at March 31, 2019 2.14 354.02 Changes in Equity Share Capital during the year - Balance at March 31, 2020 2.14 354.02
B. Other Equity Particulars Reserves and Surplus Amount Non Total Capital Securities Retained attributable controlling Reserve Premium earnings to Owners of interests Account the parent (NCI) Balance at April 01, 2018 0.10 1,877.01 (1,250.82) 626.29 (3.88) 622.39 Profit/ (Loss) for the year - - (187.57) (187.57) (0.10) (187.67) Other comprehensive income Remeasurements of the defined benefit plans - - (0.07) (0.07) 0.01 (0.06) Income tax relating to items that will not be - - (0.04) (0.04) - (0.04) reclassified to profit or (loss) Share of other comprehensive income/(loss) - - 0.16 0.16 - 0.16 of Joint ventures and Associates Net Gain arising on financial assets 1.07 1.07 1.07 measured at FVTOCI Others (3.13) (3.13) 3.13 - Total comprehensive income for the year - - (189.58) (189.58) 3.04 (186.54) Additions during the year (net of share issue - 2,848.78 - 2,848.78 - 2,848.78 expenses amounting to ` 2.94 adjusted against securities premium) Balance at March 31, 2019 0.10 4,725.79 (1,440.40) 3,285.49 (0.84) 3,284.65 Profit/ (Loss) for the year - - 103.73 103.73 1.74 105.47 Other comprehensive income Remeasurements of the defined benefit plans - - 0.26 0.26 (0.01) 0.25 Income tax relating to items that will not be - - 0.06 0.06 - 0.06 reclassified to profit or (loss) Share of other comprehensive income/(loss) - - (0.34) (0.34) - (0.34) of Joint ventures and Associates Impact on account of adoption of Ind AS 116 - - (0.07) (0.07) (0.07) Total comprehensive income for the year - - 103.64 103.64 1.73 105.38 Balance at March 31, 2020 0.10 4,725.79 (1,336.76) 3,389.13 0.90 3,390.03 Summary of Significant Accounting Policies (Refer Note 1) The accompanying notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
164 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Cash flow from operating activities Profit / (Loss) before Tax 109.57 (626.56) Depreciation,amortization and impairment 371.10 352.41 Impairment of trade/loan receivables 91.33 21.03 Share of net profit of associates and joint ventures accounted for using the equity (32.65) (6.58) method Amount no longer payable written back (0.74) (6.05) Excess provision reversed for leave encashment and gratuity - 1.57 Unrealised foreign exchange loss / (gain) 5.52 (3.03) Unwinding of interest (0.48) (1.77) Net Loss on disposal of property, plant and equipment 8.35 6.24 Net gain on financial assets measured at fair value through profit or loss (53.76) (44.40) MTM (Gain)/Losses on Swap (0.57) (1.92) Income from Investments (186.27) (7.06) Interest and finance charges 226.37 222.72 Exceptional Items (Refer Note no 3.08) 6.69 429.62 544.47 336.22 Change in operating assets and liabilities : Decrease/(increase) in trade receivables 1.69 (23.28) Decrease/(increase) in inventories 0.99 2.69 Increase/(decrease) in trade payables (27.52) 76.14 Decrease/(increase) in other financial assets (9.94) 5.04 Decrease/(increase) in other non-current assets (2.32) (9.53) Decrease/(increase) in other current assets (0.80) (14.31) Increase/(decrease) in provisions (0.44) (4.28) Increase/(decrease) in other liabilities (29.61) (68.48) Increase/(decrease) in other financial liabilities (19.10) (38.82) Cash generated from operations 457.41 261.39 Income taxes paid (25.07) (15.15) Net cash flow from / (used in) operating activities (A) 432.34 246.24 Cash flow from investing activities Payments for acquisition of property, plant and equipment (369.37) (281.58) Proceeds from sale of property, plant and equipment 1.29 2.71 Payments for purchase of investments (1,334.29) (7,944.36) Proceeds from sale of investments 4,353.80 4,997.37 Investment in Joint Venture (0.70) - Fixed Deposit made during the year (2,603.69) (71.75) Fixed Deposit redeemed during the year 688.59 1.41 Loans & Advances (Net) 7.58 1.20 Income from investments 56.83 5.55 Net cash flow from / (used in) investing activities (B) 800.03 (3,289.45) Cash flows from financing activities Proceeds from issuance of Equity Shares - 3,039.64 Expenses relating to equity infusion - (25.87) Share issue expense paid - (2.94) Proceeds from Non current borrowings - 1,144.69 Repayments of Non current borrowings (1,857.35) (760.14) Net Proceeds/(Repayments) of current borrowings 1,824.46 (77.67) Payment of lease liabilities (2.73) - Interest and finance charges (208.15) (220.15) Net cash flow from / (used in) in financing activities (C) (243.77) 3,097.56
Hathway Cable and Datacom Limited Annual Report 2019-20 165 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Consolidated Statement of Cash Flows for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Net Increase / (decrease) in cash and cash equivalents (A+B+C) 988.59 54.35 Cash and cash equivalents at the beginning of the year 81.93 30.87 Bank overdrafts at the beginning of the year (2.28) (5.57) Cash and cash equivalents at the end of the year 1,068.24 79.65 Reconciliation of cash and cash equivalents as per the cash flow statement : Cash and cash equivalents Balances with banks: On current accounts 31.84 38.05 Deposits with banks with original maturity of 3 months or less 1,046.37 40.34 Cheques/drafts on Hand 0.13 - Cash on hand 1.73 3.54 Bank overdrafts (11.83) (2.28) Balance as per the cash flow statement 1,068.24 79.65
Note : 1) Above statement has been prepared by using Indirect method as per Ind AS 7 on Statement of Cash flows. 2) Changes in liabilities arising from financing activities :
Particulars As at Net Cash Non cash changes As at March 31, 2019 Flows Foreign Exchange Fair value March 31, 2020 movement (Gain) / Loss changes Non - current Borrowings 1,895.25 (1,857.35) - 25.04 62.94 (including current maturities of Non-current Borrowings) Current Borrowings 75.53 1,824.46 - - 1,899.99 Total liabilities from financing 1,970.78 (32.89) - 25.04 1,962.93 activities
Particulars As at Net Cash Non cash changes As at March 31, 2018 Flows Foreign Exchange Fair value March 31, 2019 movement (Gain) / Loss changes Non - current Borrowings 1,508.13 384.55 - 2.57 1,895.25 (including current maturities of Non-current Borrowings) Current Borrowings 153.19 (77.66) - - 75.53 Total liabilities from financing 1,661.32 306.89 - 2.57 1,970.78 activities
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
166 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020
BACKGROUND Hathway Cable and Datacom Limited (“the Company”) is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in distribution of internet services through cable and has strategic stake in entities engaged in Cable Television business. Its equity shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India.
AUTHORISATION OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements were authorized for issue in accordance with a resolution of the Board of directors on April 23, 2020.
1. sIGNIFICANT ACCOUNTING POLICIES This note provides a list of the significant accounting policies adopted in the presentation of these consolidated financial statements. The consolidated financial statements are of the Company and its subsidiaries (collectively, “the Group”).
1.01 BASIS OF PREPARATION (i) Compliance with Ind AS The consolidated financial statements comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”) and relevant rules issued thereunder and relevant provisions of the Act. In accordance with proviso to the Rule 4A of the Companies (Accounts) Rules, 2014, the terms used in these financial statements are in accordance with the definitions and other requirements specified in the applicable Accounting standards.
(ii) Historical cost convention The consolidated financial statements have been prepared on a historical cost basis, except for the following: • certain financial assets and liabilities (including derivative instruments) are measured at fair value; and • defined benefit plans – plan assets measured at fair value. • Right of Use assets.
1.02 roUNDING OF AMOUNTS All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest crores, except where otherwise indicated.
1.03 cURRENT VERSUS NON-CURRENT CLASSIFICATION The Group presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is classified as current if: (i) it is expected to be realised or intended to sold or consumed in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is expected to be realised within twelve months after the reporting period; or (iv) the cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.
A liability is classified as current if: (i) it is expected to be settled in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is due to be settled within twelve months after the reporting period; or (iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.
Hathway Cable and Datacom Limited Annual Report 2019-20 167 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Deferred tax assets and liabilities are classified as non-current assets and liabilities. All assets and liabilities have been classified as current or non-current as per Group’s normal operating cycle. Based on the nature of operations, the Group has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
1.04 USE OF JUDGEMENTS, ESTIMATES & ASSUMPTIONS While preparing consolidated financial statements in conformity with Ind AS, the management make certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. The management continually evaluate these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments inapplying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as below:
Key assumptions (i) Financial instruments; (Refer Note 4.07) (ii) Useful lives of Property, Plant and Equipment and Intangible assets; (Refer Note 1.06 and 1.07) (iii) Assets and obligations relating to employee benefits; (Refer Note 4.02) (iv) Evaluation of recoverability of deferred tax assets; (Refer Note 2.06) and (v) Contingencies (Refer Note 4.03)
1.05 PRINCIPLES OF CONSOLIDATION AND EQUITY ACCOUNTING (i) Subsidiaries Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group combines the financial statements of the parent and its subsidiaries line by line adding together like items of assets, liabilities, equity, income and expenses. Intergroup transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated Statement of Profit and Loss, consolidated statement of changes in equity and balance sheet respectively. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non- controlling interests even if this results in the non-controlling interests having a deficit balance.
(ii) Associates Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (iv) below), after initially being recognised at cost.
(iii) Joint Ventures Under Ind AS 111 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group has only joint ventures.
168 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Interests in joint ventures are accounted for using the equity method (see (iv) below), after initially being recognised at cost in the consolidated balance sheet.
(iv) Equity method Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in Statement of Profit and Loss, and the Group’s share of other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity accounted investments are tested for impairment in accordance with the policy described in note 1.08 below.
(v) Changes in ownership interests The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity. (Refer Note 4.10)
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in statement of profit and loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate or joint venture. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed off the related assets or liabilities. The amounts previously recognised in other comprehensive income are reclassified to Statement of Profit and Loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to Statement of Profit and Loss where appropriate.
1.06 Property, Plant and Equipment property, Plant and Equipment acquired separately (i) Property, Plant and Equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price, non-refundable taxes, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, finance cost. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.
(ii) Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to Statement of Profit and Loss during the reporting period in which they are incurred.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
(iii) Set Top Boxes (STBs) and Access devices on hand at the year-end are included in Capital Work in Progress. On installation, such devices are capitalized or treated as sale, as the case may be. (iv) The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and changes, if any, are accounted prospectively. (v) Stores and Spares which meet the definition of Property, Plant and Equipment and satisfy the recognition criteria of Ind AS 16 are capitalized as Property, Plant and Equipment.
Derecognition Property, Plant & Equipment (vi) An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of an item of Property, Plant and Equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.
Depreciation on Property, Plant & Equipment (vii) Depreciation on Property, Plant and Equipment is provided on straight line method. In accordance with requirements prescribed under Schedule II of Companies Act, 2013, the Group has assessed the estimated useful lives of its Property, Plant and Equipment and has adopted the useful lives and residual value as prescribed in Schedule II except for the cost of STBs and Internet Access devices at the customer location which are depreciated on straight- line method over a period of eight years based on internal technical assessment. (viii) In case of additions or deletions during the year, depreciation is computed from the month in which such assets are put to use and up to previous month of sale, disposal or held for sale as the case may be. In case of impairment, depreciation is provided on the revised carrying amount over its remaining useful life. (ix) All assets costing up to ` 5,000/- are fully depreciated in the year of capitalisation.
Deemed cost for Property, Plant and Equipment The Group had elected to continue with the carrying value of all of its Property, Plant and Equipment recognised as of the date of transition to Ind AS measured as per the previous GAAP and use that carrying value as it’s deemed cost as of the transition date.
1.07 INTANGIBLE ASSETS Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles are not capitalised and the related expenditure is reflected in Statement of Profit and Loss in the period in which the expenditure is incurred.
Intangible Assets acquired separately Intangible assets comprises of Cable Television Franchise, Movie and Serial Rights, Bandwidth Rights, Goodwill, Softwares, Network Franchise, Customer acquisition cost and Channel Design. Cable Television Franchise represents purchase consideration of a network that is mainly attributable to acquisition of subscribers and other rights, permission etc. attached to a network.
Intangible assets with finite useful lives that are acquired are recognized only if they are separately identifiable and the Group expects to receive future economic benefits arising out of them. Such assets are stated at cost less accumulated amortisation and impairment losses. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less impairment losses.
Intangible Assets acquired in business combination Intangible Assets acquired in business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
170 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Derecognition of intangible assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in Statement of Profit and Loss when the asset is derecognised.
Amortisation of intangible assets The intangible assets with finite useful lives are amortised on a straight line basis over their useful economic lives and assessed for impairment whenever there is indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each year end. The amortisation expense on Intangible assets with finite lives and impairment loss is recognised in the Statement of Profit and Loss.
Estimated lives for current and comparative periods in relation to application of straight line method of amortisation of intangible assets (acquired) are as follows:
• Softwares are amortized over the license period and in absence of such tenor, over five years. • Movie and Serial Rights are amortized on exploitation over the balance license period in equal installments. • Channel Design are amortised over the period of five years. • Network Franchisee are amortized over the period of five to twenty years. • Customer acquisition costs are amortized over the period of five years. • Bandwidth Rights are amortized over the period of the underlying agreements. • Cable television Franchise are amortized over the period of five to twenty years. The estimated useful lives, residual values, amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Deemed cost for Intangible assets The Group had elected to continue with the carrying value of all of its Intangible assets recognised as of the date of transition to Ind AS measured as per the previous GAAP and use that carrying value as it’s deemed cost as of the transition date.
1.08 IMPAIRMENT OF ASSETS Carrying amount of Tangible assets, Intangible assets and Investments in Joint Ventures and Associates (accounted under equity method) are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or Group’s assets (cash-generating units). Non- financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
1.09 non-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Non-current assets are classified as held for sale if their carrying amount will be recovered principally through asale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale.
Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet.
A discontinued operation is a component of the entity that has been disposed off or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the Statement of Profit and Loss.
1.10 INVENTORIES Inventories are valued as follows:
Spares and maintenance items are valued at lower of cost (net of taxes recoverable) on first in first out basis or net realizable value.
Stock-in-trade comprising of access devices are valued at cost on weighted average method or at net realizable value, whichever is lower.
1.11 cASH AND CASH EQUIVALENTS Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
For the purpose of statement of cashflows, cash and cash equivalents consist of cash, short-term deposits as defined above, bank overdrafts and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value as they are considered as an integral part of the Company’s management. Bank overdrafts are shown within borrowings under current liabilities in the balance sheet.
1.12 fINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instruments.
Initial Recognition and Measurement – Financial Assets and Financial Liabilities Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
classification and Subsequent Measurement: Financial Assets The Group classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (“FVTOCI”) or fair value through profit or loss (“FVTPL”) on the basis of following: - the entity’s business model for managing the financial assets; and - the contractual cash flow characteristics of the financial asset.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Amortised Cost: A financial asset is classified and measured at amortised cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in ordertocollect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
fVTOCI: A financial asset is classified and measured at FVTOCI if both of the following conditions are met:
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
fVTPL: A financial asset is classified and measured at FVTPL unless it is measured at amortised cost or at FVTOCI.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Impairment of Financial Assets The Group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables only, the Group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Classification and Subsequent measurement: Financial Liabilities
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
financial Liabilities at FVTPL: Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL.
Gains or Losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.
other Financial Liabilities: Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Derecognition of Financial Assets and Financial Liabilities: The Group de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Group enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
offsetting Financial Instruments: Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is alegally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.
1.13 fINANCIAL LIABILITIES AND EQUITY INSTRUMENTS: classification as debt or equity: Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
equity instruments: An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received.
1.14 BORROWING COSTS Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.15 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a current pre- tax rate. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent liabilities are disclosed in the case of:
• a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;
• a present obligation arising from the past events, when no reliable estimate is possible;
• a possible obligation arising from past events, unless the probability of outflow of resources is remote.
Contingent Assets is disclosed when inflow of economic benefits is probable.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
1.16 GRATUITY AND OTHER POST-EMPLOYMENT BENEFITS (i) Short-term obligations Short term employee benefits are recognised as an expense at an undiscounted amount in the Statement of Profit and Loss of the year in which the related services are rendered.
(ii) post-employment obligations The Group operates the following post-employment schemes: • defined benefit plans such as gratuity; and • defined contribution plans such as provident fund Gratuity obligations The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised at amount net of taxes in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in Statement of Profit and Loss as past service cost. defined contribution plans The Group pays provident fund contributions to publicly administered provident funds. The Group has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
(iii) other long-term employee benefit obligations The liabilities for leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in Statement of Profit and Loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(iv) Bonus Plans The Group recognises a liability and an expense for bonuses. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
1.17 reVENUE RECOGNITION (i) Income from Rendering of services and Sale of goods The Group derives revenues primarily from Broadband business comprising of Internet services and MSO business comprising of Cable Television Services including Placement Income for placing channels of various Broadcasters on MSOs Platform and other allied services.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the group expect to receive in exchange for those products or services. Subscription revenue is recognized ratably over the period in which the services are rendered.
To recognize revenues, the Group applies the following five step approach: 1. identify the contract with a customer; 2. identify the performance obligations in the contract; 3. determine the transaction price; 4. allocate the transaction price to the performance obligations in the contract; and 5. recognize revenues when a performance obligation is satisfied
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties.
A receivable is a right to consideration that is unconditional upon passage of time. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset for these cases as right to consideration is unconditional upon passage of time. While invoicing in excess of revenue are classified as contract liabilities (which we refer to as unearned revenue).
The Group presents revenues net of indirect taxes in its Statement of Profit and Loss.
(ii) Other Operating Income Other Operating Income comprises of fees for rendering management, technical and consultancy services. Income from such services is recognized upon satisfaction of performance obligations as per the terms of underlying agreements.
(iii) Interest Income Interest income from debt instruments is recognised using the effective interest rate method.
(iv) Dividend Income Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
1.18 tAXES ON INCOME Current Tax Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the Statement of Profit and Loss is recognised outside the Statement of Profit and Loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the Group have a legally enforceable right to set-offassets against liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, except in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
1.19 eARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing cost associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.20 LEASES Effective April 1, 2019, the Group has adopted Ind AS 116 “Leases” using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as on April 1, 2019. Accordingly, the comparative information has not been restated and continues to be reported under Ind AS 17 “Lease”. Additionally, the disclosure requirements in Ind AS 116 have not generally been applied to comparative information. The following is the summary of the new and/or revised significant accounting policies related to Leases. Refer Note 1 “Significant Accounting policies”, in the Group’s 2019 Annual Report for the policies in effect for Leases prior to April 1, 2019. The effect of transition on Ind AS 116 was insignificant.
As a lessee The Group, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020
assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Group measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses incremental borrowing rate.
For short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the lease term.
As a lessor A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. Lease income from operating leases where the Group is a lessor are recognized on either a straight- line basis or another systematic basis. The Group shall apply another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. The Group present underlying assets subject to operating leases in its balance sheet according to the nature of the underlying asset.
1.21 foreIGN CURRENCY TRANSLATIONS (i) Functional and presentation currency The Group’s consolidated financial statements are prepared in INR, which is also the Group’s functional and presentation currency.
(ii) transactions and balances Monetary items Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in statement of Profit and Loss. Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other gains / (losses).
non – Monetary items: Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
1.22 seGMENT REPORTING The Chief Operational Decision Maker monitors the operating results of its business segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with Profit or Loss in the financial statements.
a) Segment revenue includes sales and other income directly attributable with allocable to segments including inter- segment revenue.
b) Expenses that are directly identifiable with / allocable to segments are considered for determining the segment results. Expenses which relate to the Group as a whole and not allocable to segments are included under unallowable expenditure.
c) Income which relates to the Group as a whole and not allocable to segments is included in unallowable income.
d) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable assets and liability represent the assets and liabilities that relate to the Group as a whole and not allocable to any segment.
178 Hathway Cable and Datacom Limited Annual Report 2019-20 Notes to the Consolidated Financial Statements CORPORATE GOVERNANCE for the year ended March 31, 2020 2.01 Property, Plant and Equipment: REPORT ON (` in Crores unless otherwise stated) Particulars Gross Carrying Amount Accumulated Depreciation / Impairment Net Carrying Amount As at Addition # Disposal As at As at For the Elimination As at As at As at April 1, 2019 March 31, 2020 April 1, 2019 Year ** on disposal March 31, 2020 March 31, 2020 March 31, 2019 Own Assets: Plant and Equipment 2,245.07 247.70 32.87 2,459.90 831.45 322.87 27.64 1,126.68 1,333.22 1,413.62 Furniture & Fixtures 20.58 0.30 - 20.88 8.63 2.00 - 10.63 10.25 11.95 Motor Vehicles 2.53 0.01 - 2.54 1.31 0.35 - 1.66 0.88 1.22 FINANCIAL STATEMENTS Office Equipments 4.85 0.46 - 5.31 3.30 0.68 - 3.98 1.33 1.55
Computers 10.83 2.10 - 12.93 8.47 1.20 - 9.67 3.26 2.36 STANDALONE Air conditioners 6.83 0.67 - 7.50 3.96 1.06 - 5.02 2.48 2.87 Structural fittings 3.51 0.08 - 3.59 1.42 0.34 - 1.76 1.83 2.09 Electrical Fittings 7.68 0.26 - 7.94 3.10 0.75 - 3.85 4.09 4.58 Mobile & Telephone 1.27 0.26 - 1.53 0.86 0.21 - 1.07 0.46 0.41 Movie Master Tapes 0.01 - - 0.01 - - - - 0.01 0.01 Total (A) 2,303.16 251.84 32.87 2,522.13 862.50 329.45 27.64 1,164.32 1,357.81 1,440.65
Hathway CableandDatacom Limited Right of Use assets: Building - 4.54 - 4.54 - 2.70 - 2.70 1.84 - Total (B) - 4.54 - 4.54 - 2.70 - 2.70 1.84 -
Total (A+B) 2,303.16 256.38 32.87 2,526.67 862.50 332.15 27.64 1,167.02 1,359.65 1,440.65 FINANCIAL STATEMENTS CONSOLIDATED Particulars Gross Carrying Amount Accumulated Depreciation / Impairment Net Carrying Amount As at Addition # Disposal As at As at For the Elimination As at As at As at April 1, 2018 March 31, 2019 April 1, 2018 Year ** on disposal March 31, 2019 March 31, 2019 March 31, 2018 Own Assets: Plant and Equipment 2,241.31 188.78 185.02 2,245.07 631.23 313.91 113.69 831.45 1,413.62 1,610.07 Furniture & Fixtures 19.77 0.81 - 20.58 6.28 2.35 - 8.63 11.95 13.49 Motor Vehicles 2.53 - - 2.53 0.94 0.37 - 1.31 1.22 1.59 Office Equipments 4.45 0.40 - 4.85 2.39 0.91 - 3.30 1.55 2.06 Computers 10.02 0.81 - 10.83 6.71 1.76 - 8.47 2.36 3.31 Annual Report 2019-20 Air conditioners 6.30 0.53 - 6.83 2.80 1.16 - 3.96 2.87 3.50 Structural fittings 3.06 0.45 - 3.51 0.89 0.53 - 1.42 2.09 2.17 Electrical Fittings 6.96 0.72 - 7.68 2.05 1.05 - 3.10 4.58 4.91 Mobile & Telephone 1.22 0.05 - 1.27 0.70 0.16 - 0.86 0.41 0.52 Movie Master Tapes 0.01 * - 0.01 - - - - 0.01 0.01 Total 2,295.63 192.55 185.02 2,303.16 654.00 322.20 113.69 862.50 1,440.65 1,641.63 * Amount Less than ` 50,000/- ** Depreciation for the Year includes Impairment of Plant and Machinery ` 97.74 (March 31, 2019 : ` 50.67) # Loss of ` Nil (March 31, 2019: ` 1.33) arising on account of exchange difference on long-term foreign currency borrowings, utilised for purchase of Property, Plant and Equipment has 179 been capitalised and included in “Additions”. The Company has also capitalised Finance cost of ` Nil (March 31, 2019: `.1.26) Refer note no 4.04 for disclosure of contractual commitments for acquisition of Property, Plant and Equipments. 180 Hathway CableandDatacom Limited
Notes to the Consolidated Financial Statements CORPORATE OVERVIEW for the year ended March 31, 2020 2.02 Intangible Assets : (` in Crores unless otherwise stated)
Particulars Gross Carrying Amount Accumulated Amortisation / Impairment Net Carrying Amount As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2019 March 31, 2020 April 1, 2019 Year *** on disposal March 31, 2020 March 31, 2020 March 31, 2019 Goodwill (aquired separately) 9.93 - - 9.93 2.12 - - 2.12 7.81 7.81 Goodwill on Consolidation 84.39 - - 84.39 - - - - 84.39 84.39 Customer Acquisition Cost 36.96 36.94 - 73.90 4.17 11.37 - 15.54 58.36 32.79 Softwares 102.34 17.08 - 119.42 79.07 12.67 - 91.74 27.68 23.27 Bandwidth Rights 21.56 0.21 - 21.77 6.01 1.85 - 7.86 13.91 15.55 Movie & Serial Rights 27.71 4.89 - 32.60 22.83 9.00 - 31.83 0.77 4.89 Network Franchise 6.05 - - 6.05 2.14 0.65 - 2.79 3.26 3.91 Annual Report 2019-20
Cable Television Franchise 35.09 - - 35.09 16.90 3.16 - 20.06 15.03 18.19 NOTICE Channel Design 1.21 - - 1.21 0.68 0.24 - 0.92 0.28 0.52 Total 325.24 59.12 - 384.36 133.92 38.95 - 172.87 211.49 191.32 * Amount less than ` 50,000/-
Particulars Gross Carrying Amount Accumulated Amortisation / Impairment Net Carrying Amount As at Addition Disposal As at As at For the Elimination As at As at As at April 1, 2018 March 31, 2019 April 1, 2018 Year *** on disposal March 31, 2019 March 31, 2019 March 31, 2018 Goodwill (aquired separately) 9.93 - - 9.93 2.12 - - 2.12 7.81 7.81 Goodwill on Consolidation 84.39 - - 84.39 - - - - 84.39 84.39
Customer Acquisition Cost - 36.96 - 36.96 - 4.17 - 4.17 32.79 - DIRECTORS’ REPORT Softwares 93.73 8.61 - 102.34 65.80 13.27 - 79.07 23.27 27.93 Bandwidth Rights 21.55 0.01 - 21.56 4.29 1.72 - 6.01 15.55 17.26 Movie & Serial Rights 22.10 5.61 - 27.71 16.00 6.83 - 22.83 4.89 6.10 Network Franchise 6.05 - - 6.05 1.72 0.42 - 2.14 3.91 4.33 Cable Television Franchise 35.06 0.03 - 35.09 13.31 3.59 - 16.90 18.19 21.75 Brand Value 1.21 - - 1.21 0.44 0.24 - 0.68 0.52 0.77 Total 274.02 51.22 - 325.24 103.68 30.24 - 133.92 191.32 170.34 *** Amortisation during the Year includes Impairment of Intangible assets ` 0.49 (March 31, 2019 : ` 0.44)
1. Range of remaining Year of amortisation as at March 31, 2020 of other Intangible assets is as below :
Assets 0 - 5 years 6 - 10 years More than 10 Years Total MANAGEMENT DISCUSSION Softwares 27.68 - - 27.68
Customer acquisition cost 58.36 - - 58.36 and Bandwidth Rights 8.01 5.44 0.46 13.91 Movie & Serial Rights 0.77 - - 0.77 ANALYSIS Cable Television Franchise 9.93 4.74 0.36 15.03 Network Franchise 2.05 1.21 0.00 3.26 Channel Design 0.28 - - 0.28 Total 107.08 11.40 0.81 119.29
2. Refer note no 2.16 (b) for information on Property, Plant and Equipment pledged as security of the group. REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.03 Investments Particulars Face As at March 31, 2020 As at March 31, 2019 Value No. of Amount No. of Amount Per shares shares Share ` Non-Current Investments in equity instrument designated at fair value through other comprehensive income - Unquoted (fully paid) Hathway Patiala Cable Pvt Ltd (formerly known as 10 71,175 3.08 71,175 3.08 Hathway Sukhamrit cable & Datacom Pvt Ltd) Investments in Government securities measured at amortised cost - Unquoted National Savings Certificates 0.16 0.16 3.24 3.24 Aggregate amount of unquoted investments 0.16 0.16 Aggregate value of investments designated at FVTOCI 3.08 3.08
2.04 Loans Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Security Deposits Considered good - unsecured 20.28 22.74 10.48 9.69 Loan receivables - credit impaired 1.93 0.33 - - Less : Provision for impairment 1.93 0.33 - - (A) 20.28 22.74 10.48 9.69 Loans to Related Parties Considered good - unsecured Loans to Joint Ventures 0.22 0.20 1.71 9.22 Loans to Firm in which Subsidiaries are 0.00 0.00 - - partner Investment in Preference share capital 0.00 0.00 - - Loan receivables - credit impaired 42.03 44.08 - - 42.24 44.28 1.71 9.22 Less : Provision for impairment 42.03 44.08 - - (B) 0.22 0.20 1.71 9.22 Other Loans Considered good - unsecured - - 0.33 0.33 Loan receivables - credit impaired 0.62 0.62 - - 0.62 0.62 0.33 0.33 Less : Provision for impairment 0.62 0.62 - - (C) - - 0.33 0.33 Total (A+B+C) 20.50 22.94 12.52 19.24
Hathway Cable and Datacom Limited Annual Report 2019-20 181 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.05 other Financial Assets Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Share application money 0.26 0.26 - - (Refer Note no. 4.03(c)) Accrued interest 0.01 0.01 131.63 2.38 Unbilled Revenue# - - 19.36 9.26 Bank deposits with more than 12 months 4.28 27.54 - - maturity ^ Other Receivables - - 0.44 0.60 Total 4.55 27.81 151.43 12.24
#Classified as financial asset as right to consideration is unconditional upon passage of time. ^Marked under lien in favour of banks
2.06 deferred Tax Assets (Net)* Particulars As at As at March 31, 2020 March 31, 2019
The balance comprises of temporary differences attributable to - Deferred tax assets in relation to: Property, Plant & Equipment 54.78 53.53 Unabsorbed Depreciation / Business Loss 260.87 380.59 Others 146.65 31.57 462.29 465.69 Deferred tax liabilities in relation to: Property, Plant and Equipment 25.46 24.87 25.46 24.87 Net Deferred Tax Assets 436.83 440.82
significant Estimates - *The deferred tax assets recognised is mainly in respect of unabsorbed depreciation allowance and brought forward losses available for set off for an indefinite period in terms of applicable tax laws. Considering the revision in business plans and growth strategy of the Group, pursuant to fresh infusion of equity capital and implementation of New Tariff Order during the previous financial year, the Management is reasonably certain of future taxable income and hence recovery of such deferred tax assets.
182 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) the movement in deferred tax asset / liabilities during the Year ended March 31, 2020 and March 31, 2019: Particulars As at Recognised in As at March 31, 2019 Profit / (Loss) March 31, 2020
Deferred Tax Assets in relation to: Property, Plant & Equipment 53.53 1.25 54.78 Unabsorbed Depreciation / Business Loss 380.59 (119.72) 260.87 Others 31.57 115.08 146.65 465.69 (3.40) 462.29 Deferred Tax Liabilities in relation to: Property, Plant and Equipment 24.87 0.59 25.46 24.87 0.59 25.46 Total 440.82 (3.98) 436.83
2.07 other Assets Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Capital Advances Unsecured, considered good unless stated otherwise Network Acquisitions 0.03 0.19 - - Advance to Suppliers 6.48 11.26 - - Doubtful 2.22 2.22 - - 8.73 13.67 Less: Allowance for bad & doubtful advances 2.22 2.22 - - (A) 6.51 11.45 - - Advances Other Than Capital Advances Unsecured, considered good unless stated otherwise Balance with Government authorities: GST Claimable 2.14 4.07 76.10 41.02 Advance Income Tax (Net of provision) 71.90 47.24 - - Deposit paid under protest 23.90 23.81 - - Prepaid expenses 0.66 2.83 5.75 8.33 Staff Advances - - 0.76 0.35 Sundry Advances 0.20 1.30 14.35 45.61 Deposit with statutory authorities 9.93 9.08 0.14 0.47 Others - * 0.01 0.09 Doubtful 16.81 10.23 - - 125.54 98.56 97.11 95.87 Less : Allowance for doubtful advances 16.81 10.23 - - (B) 108.73 88.33 97.11 95.87 Total (A+B) 115.24 99.78 97.11 95.87
* Amount less than ` 50,000
Hathway Cable and Datacom Limited Annual Report 2019-20 183 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.08 Inventories Particulars As at As at March 31, 2020 March 31, 2019 Stock of Spares & Maintenance Items 13.98 14.97 Total 13.98 14.97
2.09 current Investments Particulars As at As at March 31, 2020 March 31, 2019 Investments measured at fair value through profit or loss - Unquoted Investment in Liquid - Mutual Funds 34.10 2,995.66 Total 34.10 2,995.66 Aggregate amount of unquoted investments 33.80 2,966.74
2.10 trade Receivables Particulars Current As at As at March 31, 2020 March 31, 2019 Trade receivables - Unsecured 563.24 568.93 563.24 568.93 Less: Provision for Impairment 533.91 448.16 Total 29.33 120.77
2.11 cash and Cash Equivalents Particulars As at As at March 31, 2020 March 31, 2019 Balances with banks: In Current Accounts 31.77 38.03 Deposits with banks with original maturity of 3 months or less 1,046.37 40.34 Cheques / drafts on Hand 0.13 - Cash in hand 1.73 3.54 Total 1,080.00 81.91
2.12 Bank Balances Other Than Cash And Cash Equivalents Particulars As at As at March 31, 2020 March 31, 2019 Margin money deposit* 2,000.14 - In Current Accounts 0.06 0.02 Deposits with original maturity for more than 3 months but less than 12 months 9.30 71.07 Total 2,009.50 71.09
*Marked under lien in favour of Banks
2.13 Current Tax Assets (Net) Particulars As at As at March 31, 2020 March 31, 2019 Advance Income Tax (net of provision) 45.03 44.73 Total 45.03 44.73
184 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.14 equity Share Capital Particulars As at As at March 31, 2020 March 31, 2019 Paid up Share Capital comprises : 1,770,104,500 (March 31, 2019: 1,770,104,500) Equity Shares of ` 2/- each 354.02 354.02 fully paid up Total 354.02 354.02
a) Reconciliation of the number of shares outstanding as at the beginning and end of the reporting period: Particulars As at March 31, 2020 As at March 31, 2019 No. of shares Amount No. of shares Amount Equity Shares of ` 2 each Shares Outstanding at the beginning 1,770,104,500 354.02 830,494,500 166.10 of the Year Shares Issued during the year under - - 939,610,000 187.92 Preferential allotment (refer note (e) below) Shares Outstanding at the end of 1,770,104,500 354.02 1,770,104,500 354.02 the year
b) rights, preference and restrictions attached to shares: Terms/ Rights attached to Equity Shares The Company has issued only one class of equity shares having face value of ` 2 (March 31, 2019 : ` 2) per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by the shareholders.
c) Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate
Name of the Shareholder As at As at March 31, 2020 March 31, 2019 No. of No. of shares held shares held Equity Shares of ` 2 each Jio Content Distribution Holdings Private Limited $ 749,382,454 749,382,454 Jio Internet Distribution Holdings Private Limited $ 300,337,845 300,337,845 Jio Cable and Broadband Holdings Private Limited $ 223,980,916 223,980,916
$ Controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited - Wholly owned Subsidiary of Reliance Industries Limited, is the sole beneficiary.
Hathway Cable and Datacom Limited Annual Report 2019-20 185 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) d) details of shareholders holding more than 5% shares in the Company:
Name of the Shareholder As at March 31, 2020 As at March 31, 2019 No. of Shares % of holding No. of Shares % of holding held ` 2 each held ` 2 each Equity Shares of ` 2 each Mr. Akshay Raheja 121,413,000 6.86 121,413,000 6.86 Mr. Viren Raheja 119,553,000 6.75 119,553,000 6.75 Hathway Investments Private Limited 112,645,015 6.36 112,645,015 6.36 Jio Content Distribution Holdings 749,382,454 42.34 749,382,454 42.34 Private Limited Jio Internet Distribution Holdings 300,337,845 16.97 300,337,845 16.97 Private Limited Jio Cable and Broadband Holdings 223,980,916 12.65 223,980,916 12.65 Private Limited
e) During previous financial year, the Company had alloted on preferential basis 30,800,000 equity shares of ` 2 each at a premium of ` 30.35 per share to Hathway Investments Private Limited. Further, during previous financial year, the Company had allotted on preferential basis 908,810,000 equity shares of ` 2 each at a premium of ` 30.35 per share to the following entities (the ‘Acquirers’) aggregating to ` 2,940 representing 51.34% of post allotment equity share capital of the Company:
Name of the Acquirer No. of Amount equity shares Jio Content Distribution Holdings Private Limited 534,698,609 1,729.75 Jio Internet Distribution Holdings Private Limited 214,296,755 693.25 Jio Cable and Broadband Holdings Private Limited 159,814,636 517.00 Total 908,810,000 2,940.00
Pursuant to the aforesaid preferential allotment, the Acquirers have acquired sole control of the Company and the Acquirers and the Persons Acting in Concert (PAC) namely Reliance Industries Limited, Digital Media Distribution Trust, Reliance Content Distribution Limited and Reliance Industrial Investments and Holdings Limited have become part of the ‘promoter and promoter group’ of the Company.
During the previous financial year, on February 26, 2019 the Acquirers acquired an aggregate of 364,891,215 equity shares representing 20.61% of the total paid-up equity share capital of the Company pursuant to an open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Accordingly, as at March 31, 2019, the aggregate holding of the Acquirers in the Company stood at 1,273,701,215 equity shares of the Company representing 71.96% of the total paid-up equity share capital of the Company.
186 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.15 other Equity Particulars As at As at March 31, 2020 March 31, 2019 Retained earnings (1,336.76) (1,440.40) Capital reserve 0.10 0.10 Securities premium 4,725.79 4,725.79 Total 3,389.13 3,285.49
Description of the nature and purpose of each reserve within equity is as follows: (a) retained earnings: Retained earnings are the losses that the group has incurred till date. (b) securities premium: Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
2.16 non Current Borrowings Particulars Non Current portion Current maturities of long term debts As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Term Loans Secured From Banks - 973.00 - 319.91 From Others 43.99 382.18 17.55 116.97 Unecured From Others - 1.24 1.24 1.52 Vehicle loan from Banks Secured 0.11 0.26 0.05 0.17 Intercorporate deposit Unsecured - 100.00 - - Total 44.10 1,456.68 18.84 438.57 Amount disclosed under the head ‘Other financial liabilities’ ( Note 2.17) Less : Current maturities of long-term - - 18.84 438.57 debt (included in Note 2.17) Net Amount 44.10 1,456.68 - -
Current Borrowings Particulars As at As at March 31, 2020 March 31, 2019 Loans repayable on demand Secured Working Capital Loans repayable on demand from a bank - 15.00 Cash Credit with banks - 41.78 Overdraft with bank 1,911.82 2.28 Unsecured From Banks - 18.75 Total 1,911.82 77.81
Hathway Cable and Datacom Limited Annual Report 2019-20 187 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) a) nature of Security and terms of repayment for borrowings: Sr. Nature of Security Terms of Repayment As at March 31, 2020 As at March 31, 2019 No. Non Current Non Current Current Current Non-Current Borrowings 1 Term Loan from Others Secured 1.01 Aditya Birla Finance Ltd. i Secured by first pari passu Seventeen equal quarterly 44.12 17.65 61.76 13.24 charge on present & future installments starting movable and immovable Fixed after 1 year from the Assets of the Company and of date of first drawdown of Hathway Digital Private Limited Loan. Applicable Rate of (HDPL), a 100% subsidiary of Interest is 6 months ICICI the Company MCLR+ 1.65% ii Secured by first pari passu hypothecation of present & future Current Assets of the Company and of HDPL 2 Term Loan From Others Unsecured 2.01 Cisco System Capital India 12 Equal Quarterly - 1.24 1.24 1.52 Private Limited Installments starting from 30th January 2018. 3 Vehicle Loans from Banks Secured 3.01 Toyota Financial Services India Ltd Secured by Hypothecation of Equated Monthly 0.11 0.05 0.16 0.05 Vehicle Installment starting from March 2018 to February 2023. Gross Non-Current Borrowings 44.23 18.94 63.16 14.80 Add: Loan fully repaid prior to the - - 1,411.17 431.28 Balance sheet date Less: Unamortised upfront fees on 0.13 0.09 17.74 7.51 borrowing Net Non- Current Borrowings 44.10 18.84 1,456.58 438.57 Current Borrowings 4 Overdraft Secured Axis Bank Ltd Secured by Fixed Deposits - 1,911.82 - - of the Company of ` 2000 (Sanctioned amount ` 2000) Gross Current Borrowings - 1,911.82 - - Add: Loan fully repaid prior to the - - - 77.81 Balance sheet date Less: Unamortised upfront fees on - - - - borrowing Total Current Borrowings - 1,911.82 - 77.81
188 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) b) the carrying amount of assets pledged as security for borrowings are disclosed below: Assets pledged as security Sr. Particulars As at As at No. March 31, 2020 March 31, 2019
1 Current Inventories 13.98 14.97 Trade Receivables 75.82 166.68 Cash and Cash Equivalents 1,072.92 74.87 Bank balances other than Cash and Cash Equivalents * 2,006.33 70.00 Loans 72.53 121.82 Other financial assets 157.18 15.36 Other Current Assets 12.04 45.61 3,410.80 509.31 2 Non - current Property, Plant and Equipment 1,353.75 1,434.39 Capital Work In Progress 81.60 103.99 Goodwill 2.99 2.99 Other Intangible Assets 118.06 97.52 Loans 21.14 37.92 Other financial assets 4.36 27.65 Other Non-Current Assets 15.98 21.73 1,597.87 1,726.19 Total assets pledged as security 5,008.67 2,235.50
* Margin money deposits of ` 2,000 pledged as security for Overdraft facility availed by the Group
Hathway Cable and Datacom Limited Annual Report 2019-20 189 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 2.17 other Financial Liabilities Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Current maturities of long-term debt - - 18.84 438.57 (Refer Note no. 2.16) Interest accrued and not due - - 0.98 8.09 Security deposits 14.73 14.75 0.03 0.46 Employee benefits payable - - 7.23 7.82 Capital Creditors - Micro enterprises and small - - 0.25 - enterprises - Others - - 75.80 156.38 Liability for expenses - - 0.12 0.21 Proportionate share in Joint venture losses - - 7.79 7.90 Lease liability * - 1.92 - Other financial liabilities - Micro enterprises and small - - - - enterprises - Others - 0.01 52.25 66.07 Total 14.73 14.76 165.21 685.50
* Amount less than ` 50,000
2.18 Provisions Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Employee Benefits Provision for Bonus - - 0.05 0.05 Provision for Leave Encashment 3.51 3.57 0.27 0.52 Provision for Gratuity (non funded) 0.40 0.54 0.04 0.03 (A) 3.91 4.11 0.36 0.60 Others Mark to market losses on currency swap - 0.57 - - (B) - 0.57 - - Total (A+B) 3.91 4.68 0.36 0.60
2.19 other Liabilities Particulars Non-Current Current As at As at As at As at March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Income received in advance - - 83.29 87.76 Gratuity payables (Funded) 4.87 3.91 - - Statutory Payables * * 62.94 32.73 Others 33.38 86.02 71.73 75.40 Total 38.25 89.93 217.96 195.89
* Amount less than ` 50,000
190 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 3.01 revenue from Operations Particulars Year ended Year ended March 31, 2020 March 31, 2019 Sale of services 1,795.01 1,556.22 Sale of products 1.11 0.08 Other operating revenues 2.27 1.99 Total 1,798.39 1,558.29
* Amount less than ` 50,000/-
3.02 other Income Particulars Year ended Year ended March 31, 2020 March 31, 2019 Interest income earned on financial assets measured at Amortised Cost: Bank Deposits 185.94 6.33 Interest on Loans 0.33 0.74 Corporate guarantee / Unwinding Interest 0.48 1.77 Other Non - Operating Income Interest on Income Tax Refund 3.20 0.55 Miscellaneous Income 0.61 1.07 Amount no longer payable written back 0.74 6.05 Other Gains and Losses Net gain on financial assets measured at fair value through profit or loss 53.76 44.40 Gain on disposal of property, plant and equipment 0.69 - Total 245.75 60.91
3.03 Other Operational Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 Commission 93.21 81.01 Bandwidth & Lease Line Cost 63.94 47.36 License Fees 25.56 1.58 Other Sundry Operational Cost 27.40 16.63 Repairs & Maintenance ( Plant & Equipment ) 31.57 27.61 Rent 25.91 28.94 Consultancy & Technical Fees 19.61 25.99 Feed charges 1.48 13.19 Software & Programming Cost 9.75 7.72 Freight & Octroi Charges 1.93 0.82 Hire Charges 6.26 2.45 Total 306.62 253.30
Hathway Cable and Datacom Limited Annual Report 2019-20 191 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 3.04 employee Benefit Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 Salaries & bonus 85.09 74.44 Contribution to provident and other funds 4.96 4.47 Staff welfare expenses 4.74 3.95 Total 94.79 82.86
3.05 Finance Costs Particulars Year ended Year ended March 31, 2020 March 31, 2019 Interest expenses on financial liabilities 183.55 195.69 Exchange differences regarded as an adjustment to borrowing cost - 14.91 Other borrowing costs 42.82 10.20 Total 226.37 220.80
3.06 depreciation, Amortisation & Impairment Particulars Year ended Year ended March 31, 2020 March 31, 2019 Depreciation of Property, Plant and Equipment 234.41 271.53 Amortization of intangible assets 38.46 29.77 Impairment on Property, Plant & Equipment 97.74 50.67 Impairment on Other Intangible assets 0.49 0.44 Total 371.10 352.41
3.07 other Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 Service Charges 177.33 142.41 Bad Debts 3.93 5.36 Less: Transfer from impairment of trade receivables (Expected credit loss) 3.93 5.36 - - Electricity Expenses 29.99 28.74 Impairment of trade receivables (Expected credit loss) 89.29 21.03 Imapirment of Advances 2.04 - Advertisement & Promotion expenses 18.96 20.69 Rent - Offices 13.60 12.31 Loss on disposal / shortage of Property, Plant and Equipment 9.04 6.24 Loss on Foreign Exchange Fluctuation (Net) 5.52 22.57 Rates and taxes 4.64 3.17 Office Expenses 7.40 6.42 Legal and Professional Charges 9.73 8.98 Auditor Remuneration 0.87 0.77 Conveyance 6.29 5.93
192 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Repairs and Maintenance (Others ) 7.92 6.17 Communication Charges 2.48 3.05 Travelling 3.72 3.60 Printing and Stationery 2.87 1.61 Business Promotion Expenses 0.92 1.15 Insurance Charges 2.00 2.46 Interest on Taxes 2.35 3.84 Sitting Fees 0.31 0.38 Miscellaneous Expenses 3.83 1.98 Total 401.09 303.50
*Amount less than ` 50,000
3.08 exceptional Items* Particulars Year ended Year ended March 31, 2020 March 31, 2019 Impairment of Trade Receivables, advances & exposure to certain entities 6.69 333.92 including Joint Ventures Write down to Property Plant and Equipments - 69.83 Expenses relating to equity infusion - 25.87 Total 6.69 429.62
*Refer Note 4.11
3.09 tax Expenses Particulars Year ended Year ended March 31, 2020 March 31, 2019 (a) Income tax expenses : Current tax In respect of the current Year 0.12 0.06 0.12 0.06 Deferred tax In respect of the current Year 3.98 (438.95) 3.98 (438.95) total income tax expense/ (benefit) recognised in theY ear 4.10 (438.89) (b) reconciliation of tax expense and the accounting profit multiplied by India’s tax rate : Profit / (Loss) Before tax 109.57 (626.56) Enacted tax rate in India 25.17% 34.94% expected Income tax expenses / (benefit) at statutory tax rate 27.58 (218.92) Entities with no tax (19.24) 221.29 Share of net profit of Joint venture and Associate not taxable (8.22) (2.30) Difference in tax rates of certain entities of the Group - (0.02) Current tax (A) 0.12 0.06
Hathway Cable and Datacom Limited Annual Report 2019-20 193 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Year ended Year ended March 31, 2020 March 31, 2019 Incremental Deferred tax asset on deductible taxable differences (115.08) (36.93) Incremental Deferred tax asset on temporary differences of Tangible and (0.66) (58.40) Intangible Assets Incremental Deferred tax asset on account of Unabsorbed depreciation and 119.72 (343.62) carried forward losses Deferred tax (B) 3.98 (438.95) total (A+B) 4.10 (438.89)
4.01 earnings Per Share Particulars Year ended Year ended March 31, 2020 March 31, 2019 Basic earnings per share : (Amount in `) Attributable to equity holders of the Group 0.59 (1.90) Diluted earnings per share : (Amount in `) Attributable to equity holders of the Group 0.59 (1.90) Nominal value of Ordinary shares (Amount in `): 2.00 2.00 Reconciliation of earnings used in calculating earnings per share : Basic earnings per share Profit / (Loss) attributable to equity holders of the group used in calculating basic 103.73 (190.51) * earnings per share Diluted earnings per share Profit / (Loss) attributable to equity holders of the group used in calculating diluted 103.73 (190.51) * earnings per share Weighted average number of equity shares used as the denominator in 1,770,104,500 1,000,520,281 calculating basic and diluted earnings per share
* net of share issue expenses debited to securities premium.
4.02 employee Benefits a) defined Benefit Plans: The Present value of the defined benefit obligations and related current service cost were measured using the Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date. Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields. If the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment with LIC of India and Exide Life Insurance Corporation of India. Interest Risk A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s debt investments. Longevity Risk The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks. Salary Risk The Gratuity benefit, being based on last drawn salary, will be critically effected in case of increase in future salaries being more than assumed.
194 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Gratuity March 31, 2020 March 31, 2019 1 Expense recognized in the consolidated Statement of Profit and Loss Current Service Cost 1.10 1.02 Net Interest 0.32 0.27 Past Service Cost - - Expense recognized in the consolidated Statement of 1.42 1.29 Profit and loss 2 Other Comprehensive Income (OCI): Measurement of net defined benefit liability Actuarial (gains)/ losses arising from changes in demographic 0.47 (0.03) assumptions Actuarial (gains)/ losses arising from changes in financial 0.19 (0.14) assumption Actuarial (gains)/ losses arising from experience adjustments (0.88) 0.21 Return on plan asset excluding net interest (0.04) 0.01 Total Actuarial (Gain)/Loss recognised in OCI (0.26) 0.05 3 Change in benefit obligations: Projected benefit obligations at beginning of the year 7.83 6.71 Current Service Cost 1.10 1.02 Interest Cost 0.54 0.46 Past Service Cost - - Benefits Paid (0.55) (0.40) Actuarial (Gain) / Loss Actuarial (gains)/ losses arising from changes in demographic 0.47 (0.03) assumptions Actuarial (gains)/ losses arising from changes in financial 0.19 (0.14) assumption Actuarial (gains)/ losses arising from experience adjustments (0.88) 0.21 Projected benefit obligations at end of the year 8.70 7.83 4 Fair Value of Plan Assets Opening Fair Value of Plan Asset 3.35 2.89 Return on Plan Assets excl. interest income 0.04 (0.01) Interest Income 0.22 0.18 Contributions by Employer 0.29 0.68 Benefits Paid (0.51) (0.40) Fair Value of Plan Assets at end of the year 3.39 3.34 5 Net Liability Projected benefit obligations at end of the year 8.70 7.83 Fair Value of Plan Asset at the end of the year 3.39 3.34 Net Liability 5.30 4.49
Hathway Cable and Datacom Limited Annual Report 2019-20 195 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Particulars Gratuity March 31, 2020 March 31, 2019 6 The net liability disclosed above relates to funded and unfunded plans are as follows Projected benefit obligations at end of the year 8.25 7.26 Fair Value of Plan Asset at the end of the year 3.39 3.34 Deficit of funded plan 4.86 3.92 Unfunded Plan 0.44 0.57 Deficit of gratuity plan 5.30 4.49 7 Sensitivity Analysis Present value of benefit obligation at the end of the year on 0.50 % to 1.00 % increase in discount rate 8.37 7.54 0.50 % to 1.00 % decrease in discount rate 9.18 8.14 0.50 % to 1.00 % increase in rate of salary rate 9.18 8.12 0.50 % to 1.00 % decrease in rate of salary rate 8.37 7.56 1.00 % increase in attrition rate 8.30 7.30 1.00% point decrease in attrition rate 8.22 7.22 10% increase in mortality rate 8.26 7.26 10% decrease in mortality rate 8.26 7.26 8 Principal assumptions used for the purpose of actuarial valuation Mortality IALM (2012-2014) IALM (2012-2014) Ult Ult Interest /discount rate 6.60%-6.90% 7.30% Rate of increase in compensation 5.00% 5% - 10% Expected average remaining service 7.39 - 12.26 6.03-12.18 Employee Attrition Rate ( Past service(PS) ) 21-30 years : 21-30 years - 5.00% 10.00% - 21.70% - 21.70% 31-40 years : 5.00% 31-40 years - 5.00% - 16.90% - 16.90% 41-50 years : 3.00% 41-50 years - 3.00% - 10.00% - 10.00% 51-59 years : 0.00% 51-59 years - 0.00% - 11.11% - 11.11% 9 Investment Details Insurer managed funds (LIC of India and Exide Life Insurance 100.00% 100.00% Company Limited)
Above data pertains to Hathway Cable and Datacom Limited (Holding Company), Hathway Digital Private Limited (Wholly-owned subsidiary), Hathway Kokan Crystal Cable Network Private Limited (Subsidiary) and Hathway Bhawani Cabletel and Datacom Limited (Subsidiary) only. In the opinion of the management no material liabilities would arise on account of other subsidiaries.
196 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) (b) defined Contribution Plans: The Group contributes towards provident fund, Employee Pension Scheme, ESIC and Employees’ Deposit Linked Insurance Scheme to a defined contribution plan for qualifying employees. Under the plan, the Group is required to contribute a specified percentage of payroll cost to the defined contribution plan to fund the benefits. The Group operated defined contribution retirement benefit plans for all qualifying employees. The total expenses recognised in the statement of Profit and Loss is ` 3.66 (March 31, 2019 : ` 3.39 ) represents contribution payable to these plans by the Group at the rates specified in the rules of plan.
4.03 contingent Liabilities a) Few Broadcasters and the Company have made claims and counter claims against each other relating to pay channel cost. Claims of such broadcasters, not acknowledged as liabilities, aggregate to ` 0.93 (March 31, 2019 : ` 0.93) to the extent ascertained and not settled, are disclosed under contingent liabilities as Claims against the Company not acknowledged as debts. b) In the state of Telangana, VAT authorities have considered Set top boxes deployed as sale and raised demand of ` 18.05 (March 31, 2019 : ` 18.05) for the period April, 2011 to May 31, 2013.The Company’s appeal is pending before Tribunal. The Company has deposited 50% of the amount demanded. The authorities have also levied penalty @ 100% of demand without giving an opportunity of hearing. On writ petition, Andhra Pradesh High Court has directed to initiate fresh proceedings. Since this demand was based on an advance ruling order given by relevant authority in some other case, the Company being an affected party, has filed review petition before the Advance Ruling authority. The matter has been admitted and heard, however, the decision is awaited. c) The minority shareholders of the erstwhile joint venture company, Hathway Rajesh Multichannel Pvt. Ltd., filed an arbitration petition against the Company before the High Court, Bombay, which was referred to a sole arbitrator in August 2016. The minority shareholders, in their statement of claim have sought, amongst other reliefs, payment of ` 54.98 (March 31, 2019: ` 54.98) under various heads. The Company has refuted the claims and has made counter claim of ` 91.17 (March 31, 2019: ` 91.17) towards inter-alia outstanding content cost, loans, payments and damages/ compensation for the loss of financial and management credibility, goodwill etc. The matter is currently pending. d) Entertainment Tax Officer, Pune has raised demand for Entertainment Tax on secondary points up to October, 2014 amounting to `4.57 (March 31, 2019: ` 4.57). Writ petition has been filed before the Bombay High Court challenging the demand. Another writ petition has also been filed challenging the constitutional validity, enforceability and legality of the amendment in the Maharashtra Entertainments Duty Act, 1923 brought about w.e.f June 25, 2014. e) Karnataka VAT Department has reassessed VAT liabilities for the financial Years 2011-12, 2012-13 and 2013-14 stating that the amount realized as activation charges is sale of STBs and liable to VAT. The total tax liability is determined at ` 10.28 (March 31, 2019 : ` 10.28 ). The honorable High Court has admitted the writ petition and has granted an order of stay over recovery of taxes. f) The Holding Company had challenged computation of levy of license fees for pure Internet services before Telecom Disputes Settlement & Appellate Tribunal (TDSAT). The case has been disposed off by TDSAT during the financial year with a direction to Department of Telecommunication (DOT) that there should be a level playing field for all the Internet Service Providers (ISPs) and accordingly, DOT should raise its revised demands for the License Fee on the basis of same concept of Adjusted Gross Revenue (AGR) as is being done in the case of ISPs holding license under the old regime. TDSAT has further directed DOT to come up with a uniform policy in respect of License Fee for all the ISPs. DOT has not filed any appeal with High Court against said order, till date and is yet to issue uniform policy. The Company has continued to pay License Fee based on the concept of AGR for ISPs holding license under the old regime and the same has been charged to Statement of Profit and Loss. g) The Commercial Tax Department, Indore has raised a demand on an ex-parte assessment to pay entertainment tax amounting to ` 3.23 for the period ended February 27, 2012 and penalty thereon for ` 6.47, aggregating to ` 9.70. The Honorable Supreme Court has granted stay on the demand. However, the Company has deposited the entire tax of ` 3.23 and 25% of the penalty amounting to ` 1.62 and ` 4.85 by way of bank guarantee given based on the interim
Hathway Cable and Datacom Limited Annual Report 2019-20 197 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) order of the High Court of Madhya Pradesh. Additionally, the Company has also deposited an amount of ` 1.00 as per the direction of the Supreme Court, while granting the stay. Out of the total amount deposited ` 5.85, the company has expensed out ` 1.73. h) The Commercial Tax Department, Jaipur has raised a demand of ` 29.68 for Entertainment Tax upto March 2011. Special Leave petition has been filed before the Honorable Supreme Court challenging the order dated May 08, 2015 passed by Honorable High Court of Rajasthan, Jaipur Bench, against which Interim stay has been granted to the Company with a direction to deposit an amount of ` 2.00. i) On conclusion of investigation by the Directorate of Revenue Intelligence (DRI) on alleged evasion of customs duty on software licence on import of viewing cards, the Commissioner of Customs (Import) has passed an order demanding Custom Duty of ` 8.95 and penalty of ` 8.95. The Holding Company has deposited ` 0.67 under protest and filed an appeal against the order before Customs and Excise and Service Tax Appellate Tribunal (CESTAT), Western Zonal Branch, Mumbai. Such appeal is pending before the CESTAT. j) In the matter relating to non-exclusion of certain allowances from the definition of “Basic Wages” of the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and the decision of the Supreme Court in case of Vivekananda Vidyamandir, in the assessment of the management, the PF authority is not likely to raise any demand for the period prior to March 31, 2019 and accordingly, no provision has been made in these financial statements. k) During the current financial year, Hathway Bhawani Cabletel & Datacom Limited (HBCDL), one of our Subsidiary has received Show Cause cum Demand notices (“SCNs”) from the Department of Telecommunications ( “DOT”), Government of India on provisional assessment of due license fees for the financial years 2007-08 and 2009-10 aggregating to ` 7.87 including penalty and interest thereon (March 31, 2019: ` Nil). The Company has responded to DOT contesting the basis of their demand, the outcome of which is pending. Based on legal opinion and Managements own assessment of the matter, HBCDL is of the view that it has more then than reasonable chance of success and hence, no provision is necessary.
l) Income Tax Matters Particulars March 31, 2020 March 31, 2019 Income Tax matter under appeal 0.39 0.44 (Of the above an amounts of ` 0.59 (March 31, 2019: ` 0.21) has already been deposited with Income Tax Department)
m) Claims against the Company, other than those stated above, not acknowledged as debts are as under:
Matters with March 31, 2020 March 31, 2019 Operators & Others 6.37 6.57 Entertainment Tax Department in the city of Thane, Aurangabad, Agra, 10.83 10.38 Ghaziabad, Hyderabad, Gwalior and Delhi Other Statutory Departments 1.73 1.08 VAT department in the State of Maharashtra, Madhya Pradesh, Telangana 8.27 11.09 and Karnataka Service Tax department 0.54 5.54 Total 27.74 34.66
n) Note on pending litigations The Group has reviewed its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Group does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.
198 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) o) Foreseeable losses The Group has a process whereby periodically all long term contracts including derivative contracts are assessed for material foreseeable losses. At the year end, the Group has reviewed and ensured that adequate provision as required under any law/ applicable accounting standards for material foreseeable losses on such long term contracts including derivative contracts has been made in the books of account.
4.04 capital And Other Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) aggregate to ` 49.12 (March 31, 2019: `131.83) As a part of business strategy, the Group has expanded its area of operations in various parts of the country by entering into arrangements with local partners. Such operations are in the form of joint ventures (subsequently, some of such entities are converted into wholly owned subsidiaries). Since operations of such entities are significantly dependent on the Group’s policies, the Group is committed to provide the required support towards the operations of such entities including financial support that may be required to meet commitments / obligations of such entities.
4.05 financial Corporate Guarantee The Company has given Corporate Guarantees of ` 20.00 (March 31, 2019 : ` 39.69) to Banks towards various credit facilities extended by such banks to the Associates. The Company has given Letter of Comfort of ` 7.46 (March 31, 2019: `58.07) to Banks towards various credit facilities extended by them to related parties.
4.06 capital Management The Group’s objective while managing capital is to maintain stable capital structure to support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and / or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital that would enable to maximise the return to stakeholders.
The Group’s capital requirement is mainly to fund its business expansion and repayment of borrowings. The funds raised through issue of equity during the previous financial year is kept in Fixed Deposits with scheduled banks. During the year, the Group has availed overdraft facility against such Fixed Deposits from bank for replacing high interest rate borrowings availed earlier. Other than this funding, the principal source of funding of the Group has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets.
The Group has adhered to material externally imposed conditions relating to capital requirements and there has not been any delay or material default during the period covered under these financial statements with respect to payment of principal and interest. No lender has raised any matter that may lead to breach of covenants stipulated in the underlying documents.
4.07 financial Instruments (i) Methods and assumptions used to estimate the fair values The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, security deposits given, loans given to related parties, other bank balances, deposits, loans to employees, trade payables, payables for acquisition of non- current assets, security deposits taken, demand loans from banks and cash and cash equivalents are considered to be the same as their fair values. b) The fair values for long term loans, long term security deposits given and remaining non current financial assets were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) c) The fair values of long term security deposits taken, non-current borrowings and remaining non current financial liabilities are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs. d) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
(ii) categories of financial instruments The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: inputs which are not based on observable market data
Particulars As at March 31, 2020 As at March 31, 2019 Carrying values Fair value Carrying values Fair value Financial assets Measured at amortised cost Non- current investments 0.16 0.16 0.16 0.16 Trade receivables 29.33 29.33 120.77 120.77 Loans and Advances 33.02 33.02 42.18 42.18 Cash and Bank balances 3,093.78 3,093.78 180.54 180.54 Other financial assets 151.70 151.70 12.51 12.51 Total (A) 3,307.99 3,307.99 356.16 356.16 Measured at fair value through profit or loss Investment in mutual fund 34.10 34.10 2,995.66 2,995.66 Total (B) 34.10 34.10 2,995.66 2,995.66 Measured at fair value through other comprehensive income Investment in equity shares of other 3.08 3.08 3.08 3.08 companies Total (C) 3.08 3.08 3.08 3.08 Total Financial assets (A+B+C) 3,345.17 3,345.17 3,354.90 3,354.90 Financial liabilities Measured at amortised cost Borrowings# 1,974.76 1,974.76 1,973.06 1,973.06 Trade payables 231.06 231.06 259.32 259.32 Other financial liabilities 161.10 161.10 261.67 261.67 Total (A) 2,366.92 2,366.92 2,494.05 2,494.05 Measured at fair value through profit or loss Derivative Instruments - - 0.57 0.57 Total (B) - - 0.57 0.57 Total Financial liabilities (A+B) 2,366.92 2,366.92 2,494.62 2,494.62
# includes current maturities of long term debts
200 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) (iii) Level wise disclosure of financial instruments Particulars As at As at Level Valuation techniques and March 31, 2020 March 31, 2019 key inputs Investment in equity instruments of 3.08 3.08 3 Price earning ratio method other companies Investment in mutual funds 34.10 2,995.66 1 Closing Net Asset Value of Mutual funds Currency Swap contracts - Liability - 0.57 2 Quotes from banks
4.08 financial Risk Management The Group’s financial risk management is an integral part of how to plan and execute its business strategies. The Group’s financial risk management policy is set by the Board of Directors. The details of different types of risk and management policy to address these risks are listed below:
The business activities of the Group expose it to financial risks namely Credit risk, Liquidity risk and Market risk . In order to minimise any adverse effects on the financial performance of the Group, it uses derivative financial instruments, such as foreign exchange forward contracts, foreign currency swap contracts, call options are entered to hedge certain foreign currency risk exposures and follows policies set up by a Treasury department under policies approved by the Board of Directors.
1 credit Risk : Credit risk arises from the possibility that counter party will cause financial loss to the Group by failing to discharge its obligation as agreed.
The Group’s exposure to credit risk arises mainly from the trade receivables, unbilled revenue, loans given, financial guarantee contract and derivative financial instruments.
Credit risks from balances with banks and financial institutions are managed in accordance with the Group policy. For derivative and financial instruments, the Group attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit-ratings assigned by credit-rating agencies.
The Group’s major revenue streams arises from services provided to end use customers in the form of monthly subscription income and receivables from broadcasters for marketing and promotional income and incentives. The trade receivables and unbilled revenue on account of subscription income are typically un-secured and derived from sales made to large number of independent customers. As the customer base is distributed economically and geographically, there is no concentration of credit risk. In case of receivables and unbilled revenue from the marketing and promotional income and incentives, as there is no independent credit rating of the broadcasters available with the Group, the management reviews the credit-worthiness of the broadcasters based on their financial position, past experience and other factors.
The Group follows a simplified approach (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables and unbilled revenue. For the purpose of measuring the lifetime ECL allowance for trade receivables and unbilled revenue, the Group uses a provision matrix which comprise a very large number of small balances grouped into homogenous groups and assessed for impairment collectively. In addition, in case there are events or changes in circumstances indicating individual or class of trade receivables is required to be reviewed on qualitative aspects, necessary provisions are made.
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Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Reconciliation of changes in the loss allowances measured using life time expected credit loss model-Trade receivables Particulars Amount As at April 01, 2018 167.13 Provided during the year 286.39 Amounts written off (5.36) As at March 31, 2019 448.16 Provided during the year 90.76 Amounts written off (5.01) Provision reversed - As at March 31, 2020 533.91
The Trade Receivables includes amount due from disconnected / inactive customers / LCOs with whom no inter- connect documents have been executed and outstanding in excess of one year. The Group is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions as per expected credit loss model have been made.
2. Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Group’s liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from both domestic and international banks at an optimised cost. In addition, processes and policies related to such risks are overseen by senior management. The Group’s senior management monitors the Group’s net liquidity position through rolling forecasts on the basis of expected cash flows.
Maturities of financial liabilities The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments. As at March 31, 2020 Less Than 1 Year 1 to 5 year Total Non-Derivatives Trade payables 231.06 - 231.06 Borrowings * 1,930.75 44.23 1,974.98 Lease Liability 1.92 - 1.92 Other financial liabilities 144.45 14.73 159.18 Total 2,308.18 58.96 2,367.14 Derivatives (net settled) Currency Swap Contract - - - Total - - - * Include ` 0.22 as Prepaid Finance Charges.
202 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated)
As at March 31, 2019 Less Than 1 Year 1 to 5 year Total Non-Derivatives Trade payables 259.32 - 259.32 Borrowings * 523.89 1,474.43 1,998.32 Other financial liabilities 246.92 14.76 261.67 Total 1,030.13 1,489.19 2,519.32 Derivatives (net settled) Currency Swap Contract 0.57 - 0.57 Total 0.57 - 0.57 * Include ` 25.27 as Prepaid Finance Charges. The Group from time to time in its usual course of business has issued financial guarantees and letter of comfort to certain Joint Ventures and Associate. Accordingly, Group has issued corporate guarantee and letter of comfort for debt of ` 27.46 as on March 31, 2020 (March 31, 2019: ` 97.76). The outflow in respect of these guarantees and letter of comfort will arise only upon default of the such joint ventures and associate. An amount of ` 27.46 (March 2019 : ` 86.82) is due for repayment within 1 year and ` Nil (March 2019 : ` 10.94) is due for repayment within 1 - 5 years from the reporting date.
Financing arrangements The Group has sufficient sanctioned line of credit from its bankers / financiers; commensurate to itsbusiness requirements. The Group reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time there is sufficient availability of line of credit. The Group pays special attention to the net operating working capital invested in the business. In this regard, as in previous years, considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as to optimise accounts payable with the support of banking arrangements to mobilise funds.
3. Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group is exposed in the ordinary course of business to following risks: (a) Foreign Exchange Risk, (b) Interest Rate Risk and (c) Price Risk.
a) Market Risk – Foreign Exchange Foreign exchange risk arises on all recognised monetary assets and liabilities which are denominated in a currency other than the functional currency of the Group. The Group has foreign currency trade payables. Foreign currency risk is managed by following established risk management policies, which inter alia includes monitoring the movements in currencies in which the borrowings / capex vendors are payable and hedging the exposure to foreign currency risk, wherever considered appropriate, by entering into forward currency contracts, call options and currency swaps contracts. The Group does not enter into or trade financial instruments, including derivatives for speculative purpose. The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exposure Particulars As at As at March 31, 2020 March 31, 2019 USD USD Liabilities Trade payables 52.16 121.18 Currency Swaps - 93.64
Hathway Cable and Datacom Limited Annual Report 2019-20 203 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Unhedged Foreign Currency Exposure: Particulars As at March 31, 2020 As at March 31, 2019 Amount Amount in INR Amount Amount in INR in Foreign in Foreign Currency Currency Derivatives Liabilities - Currency Swap USD - - 1.35 93.64 Accounts Payables USD 0.69 52.16 1.75 121.18 Other Firm Commitments USD 0.32 24.24 1.86 128.62
The Group has booked INR USD Cross Currency Swap Contracts of USD NIL (March 31, 2019:USD 3.34) against the underlying INR borrowing of ` Nil (March 31, 2019 : ` 214.78). The outstanding at the year end for the same is INR ` Nil (March 31,2019: ` 92.50) and currency swap contract amount is USD Nil ( March 31,2019: USD 1.35). The actual interest earned on notional INR deposit, interest paid on notional USD borrowing, exchange fluctuation on payment/ settlement of principal amount and marked to market loss on USD exposure aggregating net gain /(loss) of ` (1.88) (March 31, 2019 : ` 0.21) are included under finance cost in note number 3.05 in Notes to the financial statements.
Foreign currency sensitivity 1 % increase or decrease in foreign exchange rates will have the following impact on profit or loss before tax and on other components of equity Particulars Impact on Profit or Loss before tax: Increase / (Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 1% increase 1% increase 1 % decrease 1 % decrease USD (0.52) 2.15 0.52 (2.15)
Particulars Impact on other components of equity: Increase / (Decrease) March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 1% increase 1% increase 1 % decrease 1 % decrease USD (0.52) (2.15) 0.52 2.15
(b) Market Risk – Interest Rate Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. During the year the Group is less exposed to interest rate risk because the Group has borrowed funds substantially at fixed interest rates. The interest rate risk is managed by the Group by the use of interest rate swap and by monitoring monthly cash flow which is reviewed by management to prevent loss of interest. The exposure of the Group’s borrowings to interest rate changes at the end of the reporting period are as follows: Particulars March 31, 2020 March 31, 2019 Variable rate borrowings* 61.76 1,737.64 Fixed rate borrowings* 1,913.22 260.69 Currency Swap (Notional Principal Amount) - 92.50
* Include ` 0.22 (March 31, 2019: ` 25.27) as Prepaid Finance Charges.
204 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Interest rate sensitivity analysis The sensitivity analysis below have been determined based on the exposure to interest rates on the borrowings at the end of the reporting period. For floating rate borrowings, the analysis is prepared assuming the amount of borrowing outstanding at the end of the reporting period was outstanding for whole of the year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel.
Particulars Impact on Profit: Impact on equity Increase/(Decrease) Increase/(Decrease) March March March March 31, 2020 31, 2019 31, 2020 31, 2019 Interest rates - increase by 100 basis points * (0.62) 17.38 (0.62) (17.38) Interest rates - decrease by 100 basis points * 0.62 (17.38) 0.62 17.38
* assuming all other variables as constant The sensitivity disclosed in the above table is attributable to variable interest rate borrowings and the interest swaps. The above sensitivity analysis is based on a reasonably possible change in the under-lying interest rate of the Group’s borrowings in INR and USD (being the significant currencies last year in which it has borrowed funds), while assuming all other variables (in particular foreign currency rates) to be constant.
(c) Market Risk - Price Risk: The Group is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. At March 31 2020, the investments in mutual funds is ` 34.10 (March 31, 2019 : ` 2,995.66). These are exposed to price risk. In order to minimise price risk arising from investments in mutual funds, the Group predominately invests in those mutual funds which have higher exposure to high quality debt instruments with adequate liquidity and no demonstrated track record of price volatility.
Price risk sensitivity: 0.10% increase or decrease in prices will have the following impact on profit/ (loss) before tax and on other components of equity.
Particulars Impact on Profit: Impact on equity Increase/(Decrease) Increase/(Decrease) March March March March 31, 2020 31, 2019 31, 2020 31, 2019 Price - increase by 0.10%* 0.03 (3.00) 0.03 3.00 Price - decrease by 0.10%* (0.03) 3.00 (0.03) (3.00)
* assuming all other variables as constant
4.09 related Party Disclosures A. name of Related Parties and Related Party Relationships: i) the Group is controlled by the following entities: Entities exercising control # Reliance Industries Limited Reliance Industrial Investments and Holdings Limited * (Protector of Digital Media Distribution Trust) Digital Media Distribution Trust Jio Content Distribution Holdings Private Limited $ Jio Internet Distribution Holdings Private Limited $ Jio Cable and Broadband Holdings Private Limited $
Hathway Cable and Datacom Limited Annual Report 2019-20 205 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) ii) other Related parties : 1 Fellow Subsidiaries Reliance Corporate IT Park Limited ^ Reliance Jio Infocomm Limited ^ Reliance Retail Finance Limited ^ TV18 Broadcast Limited ^ IndiaCast Media Distribution Private Limited ^ 2 Joint Ventures Hathway Digital Saharanpur Cable & Datacom Private Limited Hathway Sai Star Cable & Datacom Private Limited Hathway MCN Private Limited Hathway Channel 5 Cable & Datacom Private Limited Net 9 Online Hathway Private Ltd Hathway Cable MCN Nanded Private Limited Hathway Latur MCN Cable & Datacom Private Limited Hathway Palampur Cable Network Private Limited Hathway ICE Television Private Limited Hathway Sonali Om Crystal Cable Private Limited Hathway Dattatray Cable Network Private Limited Hathway Prime Cable & Datacom Private Limited Hathway SS Cable & Datacom - LLP 3 Joint ventures of Fellow Reliance-Vision Express Private Limited Subsidiaries Ryohin-Keikaku Reliance India Private Limited 4 Joint Ventures of Hathway CCN Multinet Private Limited Subsidiaries Hathway CCN Entertainment (India) Private Limited Hathway CBN Multinet Private Limited Hathway Bhaskar CCN Multi Entertainment Private Limited Hathway Bhawani NDS Network Private Limited 5 Associate of Fellow Eenadu Television Private Limited Subsidiaries Shop CJ Network Private Limited (upto June 6, 2019) TV 18 Home Shopping Network Limited (upto June 6, 2019) 6 Associate Companies Pan Cable Services Private Limited Hathway VCN Cablenet Private Limited GTPL Hathway Limited (f.k.a.GTPL Hathway Private Limited) 7 Trusts - Post Employment Hathway Cable and Datacom Limited Employee Group Gratuity Assurance Benefit Trust Scheme Hathway Digital Private Limited Employees Group Gratuity Trust 8 Key Management Executive Directors :- Personnel Mr. Rajan Gupta - Managing Director Non Executive Directors :- Independent Director Mr. Sridhar Gorthi Mr. Sasha Gulu Mirchandani Mr. Devendra Shrotri (upto August 4, 2019) Mr. A. Siddharth (w.e.f August 5, 2019 to September 3, 2019) Ms. Ameeta A Parpia
206 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated)
Non Independent Directors Mr. Rajan R. Raheja (upto January 30, 2019) Mr. Viren R Raheja Mr. Akshay R Raheja Ms. Geeta Fulwadaya (w.e.f. January 30, 2019) Mr. Anuj Jain (w.e.f. March 29, 2019) Mr. Saurabh Sancheti (w.e.f. March 29, 2019) Mr. Vinayak P Aggarwal (upto January 30, 2019) # w.e.f. January 30, 2019 * Reliance Industrial Investments and Holdings Limited - Protector of Digital Media Distribution Trust is wholly owned subsidiary of Reliance Industries Limited $ Controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited - Wholly owned Subsidiary of Reliance Industries Limited, is the sole beneficiary ^ Subsidiaries of Reliance Industries Limited.
B) Related Party Transactions compensation to Key Management Personnel:- Particulars March 31, 2020 March 31, 2019 (a) Short Term employee benefits* 4.56 2.96 (b) Post employment benefits 0.13 0.08 (c) Other long term benefits - - Total Compensation 4.69 3.04
* Short term employee benefits include sitting fees paid to directors Note: As the employment benefits such as Gratuity & Leave encashment are provided on an actuarial basis for the Company as a whole, the amount pertaining to Key Management Personnel is not ascertainable and therefore not included above.
Nature of Transactions Name of the Party Relationship F.Y. F.Y. 2019-20 2018-19 Subscription Income Hathway MCN Private Limited Joint venture 7.39 12.69 Net 9 Online Hathway Private Limited Joint Venture 0.64 0.47 Eenadu Television Private Limited Associate of 4.22 0.15 Fellow Subsidiary TV18 Home Shopping Network Limited Associate of 0.33 0.49 Fellow Subsidiary IndiaCast Media Distribution Private Fellow Subsidiary 49.29 2.88 Limited TV18 Broadcast Limited Fellow Subsidiary 7.42 2.12 Others Joint venture 7.92 12.99 Others Joint Ventures of - 2.00 Subsidiaries Others Joint Venture of 0.40 * Fellow Subsidiary
Hathway Cable and Datacom Limited Annual Report 2019-20 207 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Nature of Transactions Name of the Party Relationship F.Y. F.Y. 2019-20 2018-19 Service Charges Hathway Cable MCN Nanded Joint Venture - 0.20 Private Limited Hathway Sonali OM Crystal Cable Joint venture * - Private Limited Consultancy Income Hathway Latur MCN Cable & Joint venture 0.95 0.36 Datacom Private Limited Hathway Cable MCN Nanded Private Joint venture 0.64 0.35 Limited Hathway MCN Private Limited Joint venture 1.30 1.02 Net 9 Online Hathway Private Limited Joint venture 0.29 0.63 Others Joint Ventures of 0.11 0.23 Subsidiaries Interest on Loans Hathway Sai Star Cable & Joint venture 0.16 0.17 Datacom Private Limited Others Joint ventures - 0.01 Activation Income Hathway MCN Private Limited Joint venture - 0.01 Hathway Latur MCN Cable & Datacom Joint venture - 0.08 Private Limited Hathway Bhawani NDS Network Joint Venture of - 0.04 Private Limited Subsidiary Sales of Access Devices / Parts and Hathway CCN Multinet Private Joint Venture of - 0.43 Accessories Limited Subsidiary Hathway CCN Entertainment (India) Joint Venture of - 0.60 Private Limited Subsidiary Hathway CBN Multinet Private Limited Joint Venture of - 1.24 Subsidiary Hathway MCN Private Limited Joint Venture of 0.91 - Subsidiary Others Joint venture 0.19 - Dividend Income GTPL Hathway Limited Associate 4.20 4.20 Sales - Capital Assets Hathway CCN Entertainment Joint Venture of 0.17 - (India) Private Limited Subsidiary Others Joint Venture of * - Subsidiary EXPENSES Feed charges Hathway MCN Private Limited Joint venture 2.96 7.77 Hathway Sai Star Cable And Datacom Joint venture 2.23 0.39 Private Limited Others Associate 0.08 - Others Joint ventures 2.74 0.89 Others Joint Ventures of 0.06 2.47 Subsidiaries
208 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Nature of Transactions Name of the Party Relationship F.Y. F.Y. 2019-20 2018-19 Rent Offices Mr. Akshay R Raheja Key Management 2.17 2.12 Personnel Mr. Viren R Raheja Key Management 2.17 2.12 Personnel Hathway Sai Star Cable And Datacom Joint venture - 0.06 Private Limited Pay Channel Cost TV18 Broadcast Limited Fellow Subsidiary 77.89 11.32 Eenadu Television Private Limited Associate of 13.82 0.25 Fellow Subsidiary Consultancy Charges Hathway CCN Multinet Private Joint Venture of 0.09 - Limited Subsidiary Bad Debts written off Hathway Dattatray Cable Network Joint venture 2.00 2.00 Private Limited Impairment of Doubtful Advances / GTPL Hathway Limited Associate 3.69 - Receivables Hathway Dattatray Cable Network Joint venture 0.55 - Private Limited Contribution to Gratuity Fund Hathway Cable and Datacom Trust 0.13 0.46 Limited Employee Group Gratuity Assurance Scheme Hathway Digital Private Limited Trust 0.18 0.21 Employees Group Gratuity Trust Business Support Expense Reliance Industries Limited Entity exercising 0.01 - control Bandwidth and Lease Line Cost Reliance Jio Infocomm Limited Fellow Subsidiary 35.53 - Purchase - STB / Parts and Accessories Reliance Jio Infocomm Limited Fellow Subsidiary 0.03 - Advance Written off Hathway Sonali OM Crystal Cable Joint Venture 2.00 - Private Limited Exceptional Item Hathway Dattatray Cable Network Joint Venture - 8.52 Private Limited Hathway Sonali OM Crystal Cable Joint Venture - 14.05 Private Limited Hathway Sai Star Cable & Datacom Joint Venture - 5.79 Private Limited GTPL Hathway Limited Associate - 2.50 Hathway Palampur Cable Network Joint Venture 0.12 - Private Limited Hathway Digital Saharanpur Cable Joint Venture 0.42 - & Datacom Private Limited Others Joint Ventures - 0.50 Others Joint Ventures of - 7.34 Subsidiaries
Hathway Cable and Datacom Limited Annual Report 2019-20 209 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Nature of Transactions Name of the Party Relationship F.Y. F.Y. 2019-20 2018-19 Change in Assets/Liabilities during the year Impairment in value of Investments Hathway Sonali OM Crystal Cable Joint Venture - 4.09 made during the year Private Limited Hathway Palampur Cable Network Joint Venture 0.12 - Private Limited Hathway Bhaskar CCN Multi Joint Venture of - 2.58 Entertainment Private Limited Subsidiary Allowance for Bad Debts (Adjusted) Hathway Dattatray Cable Network Joint Venture 1.45 - Private Limited Allowance for bad and doubtful loans Hathway Bhaskar CCN Multi Joint Venture of - 0.30 made during the year Entertainment Private Limited Subsidiary Hathway Sonali OM Crystal Cable Joint Venture (2.00) 7.68 Private Limited GTPL Hathway Limited Associate - 2.50 Others Joint Ventures of - 0.35 Subsidiaries Allowance for bad and doubtful Hathway CCN Multinet Private Limited Joint Venture of - 3.00 debts made during the year Subsidiary Hathway Dattatray Cable Network Joint Venture - 8.38 Private Limited GTPL Hathway Limited Associate 3.69 - Others Joint Ventures - 1.46 Others Joint Ventures 0.42 2.27 Net Advances / Trade Receivables Hathway Dattatray Cable Network Joint Venture - 6.91 / Trade Payables made during the Private Limited year TV18 Broadcast Limited Fellow Subsidiary 7.65 - Others Joint Ventures 0.31 0.40 Others Joint Ventures of 0.21 1.30 Subsidiaries Others Associate of 0.57 1.67 Fellow Subsidiary Others Joint Venture of 0.01 0.01 Fellow Subsidiary Net Advances / Trade Receivables / GTPL Hathway Limited Associate 8.82 - Trade Payables Recovered / Paid during Hathway SS Cable & Datacom LLP Joint Venture 0.14 0.20 the year Hathway Sonali OM Crystal Cable Joint Venture 2.00 0.27 Private Limited Hathway Dattatray Cable Network Joint Venture 4.27 - Private Limited Hathway CCN Multinet Private Limited Joint Venture of 1.13 0.35 Subsidiary IndiaCast Media Distribution Private Fellow Subsidiary 2.07 - Limited Hathway Sai Star Cable & Datacom Joint Venture 4.06 15.32 Private Limited
210 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Nature of Transactions Name of the Party Relationship F.Y. F.Y. 2019-20 2018-19 Eenadu Television Private Limited Associate of 1.98 - Fellow Subsidiary Reliance Jio Infocomm Limited Fellow Subsidiary 13.29 - Others Joint Venture of 0.06 - Fellow Subsidiary Others Joint Ventures 3.66 0.60 Others Joint Venture of 1.14 0.23 Subsidiaries Others Fellow - 7.68 Subsidiaries Investment made during the year Hathway Sai Star Cable & Joint Venture 0.70 - Datacom Private Limited Equity shares issued during the year Jio Content Distribution Holdings Entity exercising - 1,729.75 Private Limited control Jio Internet Distribution Holdings Entity exercising - 693.25 Private Limited control Jio Cable and Broadband Holdings Entity exercising - 517.00 Private Limited control
Nature Name of the Party Relationship As at As at March March 31, 2020 31, 2019 CLOSING BALANCES Equity Share Capital (incl. Securities Jio Content Distribution Holdings Entity exercising 1,729.75 1,729.75 Premium) Private Limited control Jio Internet Distribution Holdings Entity exercising 693.25 693.25 Private Limited control Jio Cable and Broadband Holdings Entity exercising 517.00 517.00 Private Limited control Investments GTPL Hathway Limited Associate 168.75 168.75 Hathway Sai Star Cable & Joint Venture 27.80 27.09 Datacom Private Limited Others Joint Ventures of 11.45 11.45 Subsidiaries Others Associate 0.10 0.10 Others Joint Ventures 42.65 42.65 Loans & advances Hathway Sonali OM Crystal Cable Joint Venture 13.48 15.48 Private Limited Hathway CCN Multinet Private Joint venture of 1.63 1.63 Limited Subsidiary Hathway VCN Cablenet Private Limited Associate 5.50 5.50 Others Associate 3.49 9.99 Others Joint Ventures 2.69 3.70
Hathway Cable and Datacom Limited Annual Report 2019-20 211 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated)
Nature Name of the Party Relationship As at As at March March 31, 2020 31, 2019 Post Employment benefit plan-Advance Hathway Cable and Datacom Trust 0.01 0.01 Limited Employees Group Gratuity Assurance Scheme Allowance for bad and doubtful debts Hathway Channel 5 Cable & Joint Venture 3.81 3.81 Datacom Private Limited Hathway Dattatray Cable Network Joint Venture 6.92 8.38 Private Limited Others Associate 4.01 0.32 Others Joint Venture 3.49 3.08 Others Joint Ventures of 4.47 4.46 Subsidiaries Impairment in Value of Investments Hathway Channel 5 Cable & Joint Venture 6.28 6.28 Datacom Private Limited Hathway Sai Star Cable & Datacom Joint Venture 16.68 16.68 Private Limited Hathway Sonali OM Crystal Cable Joint Venture 15.17 15.17 Private Limited Hathway Bhaskar CCN Multi Joint venture of 2.58 2.58 Entertainment Private Limited Subsidiary Others Joint Ventures of 0.15 0.15 Subsidiary Others Associate 0.10 0.10 Others Joint Venture 3.73 3.61 Allowance for bad and doubtful loans Hathway Sonali OM Crystal Cable Joint Venture 13.45 15.45 Private Limited Hathway VCN Cablenet Private Limited Associate 5.50 5.50 Hathway CCN Multinet Private Joint venture of 1.63 1.63 Limited Subsidiary Others Associate 3.09 3.09 Others Joint Ventures 1.42 1.42 Trade Payables TV18 Broadcast Limited Fellow Subsidiary 8.39 17.42 Eenadu Television Private Limited Associate of 3.84 0.32 Fellow Subsidiary Reliance Jio Infocomm Limited Fellow Subsidiary 13.33 - Others Joint Ventures 1.81 1.23 Others Joint Ventures of - 0.17 Subsidiaries
212 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated)
Nature Name of the Party Relationship As at As at March March 31, 2020 31, 2019 Trade Receivables Hathway Dattatray Cable Network Joint Venture 5.80 9.93 Private Limited Others Associate 1.78 4.10 Others Joint Ventures 9.38 15.16 Others Joint Ventures of 2.43 8.46 Subsidiaries IndiaCast Media Distribution Fellow Subsidiary 5.55 4.74 Private Limited Others Associate of 4.10 1.83 Fellow Subsidiary TV18 Broadcast Limited Fellow Subsidiary 0.75 - Others Joint Venture of - 0.01 Fellow Subsidiary Unbilled Revenue TV18 Broadcast Limited Fellow Subsidiary - 2.12 IndiaCast Media Distribution Fellow Subsidiary - 2.88 Private Limited Eenadu Television Private Limited Associate of - 0.15 Fellow Subsidiary Hathway CCN Multinet Private Limited Joint Venture of 0.67 0.67 Subsidiary Others Joint Ventures 0.77 1.28 Others Joint Ventures of 0.47 0.44 Subsidiaries Other Financial Liability Hathway SS Cable & Datacom LLP Joint Venture 2.94 2.80 Security Deposits (Received) Hathway CBN Multinet Private Joint Venture of - 0.51 Limited Subsidiary Hathway CCN Entertainment (India) Joint Venture of - 1.21 Private Limited Subsidiary Hathway CCN Multinet Private Joint Venture of - 2.00 Limited Subsidiary Others Joint Venture 0.02 0.02 Security Deposits (Given) Mr. Viren R Raheja Key Management 1.84 1.84 Personnel Mr. Akshay R Raheja Key Management 1.84 1.84 Personnel
The Company has extended aggregate loan of ` 43.95 to various joint ventures and associates, out of which ` 8.43 is interest free. The Company has given Corporate financial Guarantees of ` 20 (March 31, 2019 ` 39.69) on behalf of GTPL Hathway Limited. The Company has given Letter of Comfort of ` 7.46 (March 31, 2019: ` 58.07) to Banks towards various credit facilities extended by them to related parties.
Hathway Cable and Datacom Limited Annual Report 2019-20 213 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 4.10 Interest In Other Entities a) Subsidiaries The Group’s subsidiaries at March 31, 2020 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the Group, and the proportion of ownership interest held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name of Subsidiary Principal Activity Place of Proportion of Incorporation ownership interest & Operation and voting power held by them March March 31, 2020 31, 2019 Hathway New Concept Cable & Datacom Private Cable Television network Services India 100.00% 100.00% Limited Hathway Software Developers Private Limited Cable Television network Services India 100.00% 100.00% Hathway Bhawani Cabletel & Datacom Limited Cable Television network Services India 51.60% 51.60% Hathway Digital Private Limited Cable Television network Services India 100.00% 100.00% Hathway Broadband Private Limited Internet Service Provider India 100.00% 100.00% Hathway Krishna Cable Private Limited Cable Television network Services India 100.00% 100.00% Bee Network and Communication Private Limited Cable Television network Services India 100.00% 100.00% Hathway Nashik Cable Network Private Limited Cable Television network Services India 90.06% 90.06% Hathway Kokan Crystal Cable Network Private Cable Television network Services India 96.36% 96.36% Limited Hathway Cnet Private Limited Cable Television network Services India 100.00% 100.00% Channels India Network Private Limited Cable Television network Services India 95.63% 95.63% Hathway Enjoy Cable Network Private Limited Cable Television network Services India 100.00% 100.00% Hathway JMD Farukhabad Cable Network Private Cable Television network Services India 100.00% 100.00% Limited Chennai Cable Vision Network Private Limited Cable Television network Services India 75.99% 75.99% Hathway Media Vision Private Limited Cable Television network Services India 100.00% 100.00% Elite Cable Network Private Limited Cable Television network Services India 80.00% 80.00% Hathway United Cables Private Limited Cable Television network Services India 100.00% 100.00% UTN Cable Communications Private Limited Cable Television network Services India 100.00% 100.00% Hathway Space Vision Cabletel Private Limited Cable Television network Services India 100.00% 100.00% Hathway Gwalior Cable & Datacom Private Limited Cable Television network Services India 100.00% 100.00% Ideal Cables Private Limited Cable Television network Services India 100.00% 100.00% Binary Technology Transfers Private Limited Cable Television network Services India 100.00% 100.00% Hathway Internet Satellite Private Limited Cable Television network Services India 100.00% 100.00% ITV Interactive Media Private Limited Cable Television network Services India 100.00% 100.00% Liberty Media Vision Private Limited Cable Television network Services India 100.00% 100.00% Vision India Network Private Limited Cable Television network Services India 100.00% 100.00% Win Cable & Datacom Private Limited Cable Television network Services India 100.00% 100.00% Hathway Mysore Cable Network Private Limited Cable Television network Services India 100.00% 100.00% Hathway Mantra Cable & Datacom Private Limited Cable Television network Services India 100.00% 100.00%
214 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) b) non-controlling interests The Group doesn’t have any material subsidiary warranting a disclosure in respect of individual subsidiaries.
c) Interest in Joint Ventures and Associates Details of joint ventures
Name of Joint ventures March 31, 2020 March 31, 2019 Proportion Amount Proportion Amount of ownership of ownership interest and interest and voting power voting power held by them held by them Hathway Cable MCN Nanded Private Limited 45.05% 0.46 45.05% 0.30 Hathway ICE Television Private Limited 51.00% - 51.00% - Hathway Latur MCN Cable & Datacom Private Limited 51.00% - 51.00% - Hathway Sai Star Cable & Datacom Private Limited 51.00% 10.89 51.00% 10.12 Hathway Sonali OM Crystal Cable Private Limited 68.00% 1.10 68.00% - (Refer Note 4.18) Net 9 Online Hathway Private Limited 50.00% 3.07 50.00% 3.05 Hathway Palampur Cable Network Private Limited 51.00% - 51.00% 0.19 Hathway Prime Cable & Datacom Private Limited 51.00% - 51.00% - Hathway MCN Private Limited 51.00% 5.40 51.00% 4.41 Hathway SS Cable & Datacom LLP 51.00% - 51.00% - Hathway Digital Saharanpur Cable & Datacom Private 51.00% - 51.00% - Limited Hathway Channel 5 Cable & Datacom Private Limited 51.00% - 51.00% - Hathway Dattatray Cable Network Private Limited 51.00% - 51.00% - Hathway CBN Multinet Private Limited 51.00% 1.30 51.00% 0.72 (Joint venture of Subsidiary) Hathway CCN Entertainment (India) Private Limited 51.00% 4.03 51.00% 4.00 (Joint venture of Subsidiary) Hathway CCN Multinet Private Limited 51.00% 6.99 51.00% 6.39 (Joint venture of Subsidiary) Hathway Bhaskar CCN Multi Entertainment Private Limited 70.00% - 70.00% - (Joint venture of Subsidiary) Hathway Bhawani NDS Network Private Limited 51.00% 0.33 51.00% 0.31 (Joint venture of Subsidiary)
Place of Incorporation and Operation of all the joint ventures is in India only Except for Net 9 Online Hathway Private Limited, the principal activity of joint ventures is Cable Television network services The princpal activity of Net 9 Online Hathway Private Limited is Internet Service provider
Hathway Cable and Datacom Limited Annual Report 2019-20 215 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Details of Associates Name of Associates March 31, 2020 March 31, 2019 Proportion Amount Proportion Amount of ownership of ownership interest and interest and voting power voting power held by them held by them GTPL Hathway Limited (f.k.a. GTPL Hathway Pvt Ltd) * 37.32% 632.27 37.32% 607.71 Hathway VCN Cablenet Private Limited 25.03% - 25.03% - Pan Cable Services Private Limited 33.33% - 33.33% -
Place of Incorporation and Operation of all the associates is in India only. The princpal activity of all the associates is Cable Television network services except for GTPL Hathway Limited, which is engaged in activities of Cable Television network and Internet services * Quoted fair value as on March 31, 2020: ` 171.04 (As on March 31, 2019: ` 287.93)
Information of associate that is material to the Group GTPL Hathway Limited (f.k.a. GTPL Hathway Pvt Ltd) is the associate of the Group as at March 31, 2020 which, in the opinion of the directors, are material to the Group.
Share in Contingent liabilities of GTPL Hathway Limited (f.k.a. GTPL Hathway Pvt Ltd) : 1 GTPL Broadband Private Limited (GBPL), one of subsidiary Company of our associate GTPL Hathway Ltd, has been granted Unified License from Ministry of Communications & IT, under Government of India, under which GBPL is required to pay an annual license fee at the rate of 8% of the its adjusted gross revenue. The Company, GBPL, along with others has filed a petition (petition no. 655 of 2015) under sections 14 and 14A of the TRAI Act against the DoT before the Telecom Dispute Settlement Appellate Tribunal (TDSAT). It was averred that the unified ISP license policy arbitrarily distinguished between existing ISP licenses required to be renewed and existing ISP licenses not requiring renewal for the near future. Further, it was averred that the inclusion of revenue from ‘pure internet services’ in the adjusted gross revenue for the computation of license fees under DoT’s new unified ISP license policy was contrary to the order dated October 12, 2012 of the TDSAT (in petition No. 429 of 2012). TDSAT vide its order dated December 10, 2015 (TDSAT Order) has granted stay with respect to the matter filed by the Company. Further, GBPL has also filed petition with the TDSAT on inclusion of revenue from ‘pure internet services’ in the adjusted gross revenue for the computation of license fees (petition no. 193 of 2018). TDSAT has under the said petition directed DoT to not to take any coercive action against GBPL subject to GBPL submitting an undertaking to TDSAT stating that it shall pay full amount of the license fees with interest if finally the matter is decided against GBPL. On the basis of the TDSAT Order, the license fee till March 31, 2020 works out to `43.55 (Group share= `.16.25) (8% of ` 544.39 adjusted gross revenue). while for the period March 31, 2019, `31.12 (Group share= `.11.62) (8% of ` 389.03 adjusted gross revenue) has been considered to be contingent in nature. 2 A shareholder of GTPL Kolkata Cable & Broadband Pariseva Limited(GTPL KCBPL) one of the subsidiary company of our associate GTPL Hathway Ltd offered to sale his 30,000 share to GTPL KCBPL (buy back), price offered by GTPL KCBPL was not accepted by him hence the matter was then referred to Company Law Board, whereby Board appointed valuer. Valuation finalized by Company Law Board was not accepted by GTPL KCBPL, hence, petition was filed with High Court against Board’s order. Value was finalized by valuer of High Court at ` 2.4 (` 800/- per share). Hence, petition was filed in Supreme Court against order passed by high court. Supreme Court agreed to hear petition on a condition that “GTPL KCBPL to deposit ` 2 in cash & ` 0.48 (Group share= ` 0.93) as bank guarantee with registrar of court”. Hence, company has paid ` 2.48 (Group share= ` 0.93) as guarantee with Registrar and petition is yet to be heard in Supreme Court.
216 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 3 The Department of Telecommunication, Ministry of Communication, Government of India, Gujrat Telecom circle, Ahmedabad (“DOT”) vide its letters, the latest being February 15, 2020, have raised demand consisting of principal amount of ` 228.65 (Group share= ` 85.33) and interest, penalty and interest on penalty (as of January 15, 2020) of ` 706.88 (Group share= ` 263.81) towards license fee in respect of the GTPL internet service provider’s license (ISP). GTPL has made representations contensting the basis of such demand of DOT. GTPL is currently waiting the outcome of the representations before deciding future course of action in the matter. Considering GTPL’s assessement of this demand, uncertainity relating to outcome of the GTPL’s reprentation to the DOT and based on the opinion of the legal expert, GTPL is confident that it has good ground on merit to defend itself in the above matter. Accordingly, GTPL is of the view that no provision is necessary in respect of the aforesaid matter in the financial statements. 4 Claims against the Company not acknowledged as debt: (Group’s Share)
Particulars March 31, 2020 March 31, 2019 Income Tax Matters 3.24 3.67 Sales-Tax/VAT Matters 3.93 3.14 Entertainment Tax Matters 2.63 2.63 Custom Duty Matters 17.30 11.67 Services Tax Matters 7.24 7.24 ESIC Matters 0.12 -
Summarised financial information for Associate The tables below provide summarised financial information for an Associate that is material to the Group. The information disclosed reflects the amounts presented in the financial statements of such associate and not parent’s share of those amounts.
Summarised balance sheet Particulars GTPL hathway Limited (f.k.a GTPL Hathway Pvt Ltd) March 31, 2020 March 31, 2019 Current assets Cash and cash equivalents 76.95 123.50 Other assets 565.97 512.39 Total Current assets 642.92 635.89 Total Non current assets 1,541.03 1,396.09 Current liabilities Financial Liabilities 844.60 593.80 Other liabilities 378.01 430.74 Total current liabilities 1,222.61 1,024.55 Non current liabilities Financial Liabilities 83.69 152.64 Other liabilities 149.34 190.01 Total Non current liabilities 233.03 342.65 Net assets 728.30 664.78
Hathway Cable and Datacom Limited Annual Report 2019-20 217 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Summarised statement of profit and loss Particulars GTPL hathway Limited (f.k.a GTPL Hathway Pvt Ltd) March 31, 2020 March 31, 2019 Revenue 2,384.08 1,245.82 Interest Income 4.37 4.98 Depreciation & amortisation 231.74 201.92 Interest expense 44.95 51.36 Income Tax expense 69.80 18.45 Profit or (loss) for the year 87.72 24.80 Other Comprehensive income or (loss) for the year (0.67) 0.29 Total Comprehensive Income or (loss) for the year 87.05 25.08 Dividend received 4.20 4.20
d) Individually immaterial Joint ventures and Associates Commitments and Contingent liabilities in respect of immaterial Joint ventures and Associates
Particulars March 31, 2020 March 31, 2019 Capital and Other commitments Share of capital commitment in Joint Venture - - Bank Guarantees Share of bank guarantee in Joint Venture - - Contingent liabilities Share in Associates' contingent liabilities - - Share in Joint Ventures' contingent liabilities in respect of VAT/CST, 0.19 0.23 excise and service tax claims not acknowledged as debts
Particulars March 31, 2020 March 31, 2019 Aggregate carrying amount of individually immaterial Joint ventures 33.57 29.49 and Associates Aggregate amounts of the group’s share of: Profit/(loss) from continuing operations 3.64 (0.47) Post-tax profit or loss from discontinued operations - - Other comprehensive income (0.01) 0.01 Total comprehensive income 3.63 (0.46)
Particulars March 31, 2020 March 31, 2019 Share of profits/ (losses) from Joint Venture 2.40 1.05 Share of profits /(losses) from Subsidiary's Joint Ventures 1.23 (1.51) Share of profits/ (losses) from Associate - - Total share of profits / (losses) from Joint Ventures and Associates 3.63 (0.46)
218 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Unrecognised share of loss of associates Particulars March 31, 2020 March 31, 2019 Unrecognised share of loss for the year of associates * * Cumulative unrecognised share of loss of associates (2.33) (2.33)
* Amount less than ` 50,000/-
e) Summary of carrying amount of Group’s interest in associates and joint ventures accounted using equity method
Particulars March 31, 2020 March 31, 2019 Carrying amount of material associate 632.27 607.71 Carrying amount of immaterial associates - - Carrying amount of material joint ventures - - Carrying amount of immaterial joint ventures 33.57 29.49 Total 665.84 637.20 Aggregate amount of impairment in carrying amount of investment 7.26 7.14
f) reconciliation of Net Assets considered for Consolidated financial statement to Group’s share inN et Assets as per Associates’ and Joint ventures’ financial statements Particulars March 31, 2020 March 31, 2019 Group's share in Net Assets of Associates' and Joint ventures as per 284.48 256.43 Entity's Financials Add/ (Less) : Consolidation adjustment (i) Goodwill on consolidation 100.62 100.62 (ii) Fair value of Investments and Others 333.71 333.12 (iii) Change in stake (52.97) (52.97) Net Asset as per Consolidated Financials 665.84 637.20
Change in Group’s ownership interest in subsidiary There is no change in group’s ownership interest in subsidiaries during the financial year 2019-20 and financial year 2018-19.
4.11 exceptional Items a) During the year, the Group has Impaired (i) Investments in Joint ventures; and (ii) advances and receivable from erstwhile joint venture, which is currently under litigation. This impairment having one-time, non-routine impact on financial statements, hence been disclosed as “Exceptional Item” in Consolidated Financial Statements.
b) During the previous financial year, the company In view of the New Regulatory Framework for Broadcasting and Cable services sector notified by the Telecom Regulatory Authority of India (TRAI), which was effective from 1st February 2019, resulted into changes in pricing mechanism and arrangements amongst the Company, LCOs and Broadcasters; the Management, based on a review, has provided for (a) impairment of trade receivables, advances and exposure to certain entities including Joint Ventures ; (b) write down to the recoverable value of certain assets ; (c) expenses relating to equity infusion. These adjustments, having one-time, non-routine material impact on financial statements, hence been disclosed as “Exceptional Item” in Consolidated Financial Statements.
Hathway Cable and Datacom Limited Annual Report 2019-20 219 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 4.12 Goodwill On Consolidation comprises of: Particulars March 31, 2020 March 31, 2019 Goodwill on Consolidation 86.26 86.26 Less :Capital Reserve on Consolidation (1.87) (1.87) Net Goodwill on Consolidation 84.39 84.39
4.13 revenue from contract with customers Management conclude that disaggregation of revenue disclosed in Ind AS 108 meets the disclosure criteria of Ind AS 115 and segment revenue is measured on the same basis as required by Ind AS 115, hence separate disclosures as per Ind AS 115 is not required.
Contract Balances The Group classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Trade receivable and unbilled revenues are presented net of impairment in the Consolidated Balance Sheet.
The following table provides information about receivables, contract assets and contract liabilities for the contracts with the customers.
Particulars March 31, 2020 March 31, 2019 Receivables, which are included in 'Trade and other receivables' 29.33 120.77 Contract assets - - Contract liabilities (Unearned revenue) 83.29 87.77
The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional.The contract liabilities primarily relate to the billing recognized in advance where performance obligations are yet to be satisfied.
Significant changes in the contract assets and the contract liabilities balances during the period are as follows.
Particulars As at March 31, 2020 As at March 31, 2019 Contract assets Contract Contract assets Contract liabilities liabilities Balance at the beginning of the year - 87.77 - 104.21 Advance Income received from the - 83.29 - 87.77 customer during the year Revenue recognized that is included in the - 87.77 - 104.21 contract assets balance at the beginning of the year Balance at the end of the year - 83.29 - 87.77
Performance Obligations And Remaining Performance Obligations The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Group expects to recognize these amounts in revenue.
Applying the practical expedient as given in Ind AS 115, the Group has not disclosed the remaining performances as the performance obligations relates to contracts that have an original expected duration of one year or less.
220 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
Contract costs The group incurred cost of ` 36.94 (March 2019: ` 36.96) during the year as a result of obtaining customers. The group has therefore capitalised them as customer acquisition costs.
Customer acquisition costs are amortised over the period of five years.
4.14 Leases (a) Lessee : The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the balance sheet at the date of initial application i.e. April 1, 2019 is 8.75%. The difference between the lease obligation recorded as of March 31, 2019 under Ind AS 17 disclosed under Note 4.02 of consolidated financial statements forming part of 2019 Annual Report and the value of the lease liability as of April 1, 2019 is primarily on account of inclusion of extension and termination options reasonably certain to be exercised, in measuring the lease liability in accordance with Ind AS 116 and discounting the lease liabilities to the present value under Ind AS 116. Short term leases accounted in the Statement of Profit and Loss for the FinancialYear 2019-20 is ` 45.77. The Group’s significant leasing arrangements in terms of Ind AS 116 on lease are in respect of Leases for Premises and Equipments. Some of these lease arrangements have price escalation clauses. The period of these leasing arrangements, range between eleven months to nine years and are renewable by mutual consent.
(b) Lessor : The right to use granted to joint ventures/local cable operators in respect of Access devices are not classified as lease transactions as the same are not for an agreed period of time. 4.15 segment Information The Group reportable segments under Ind AS 108 are Broadband Business and Cable Television.
Segment Revenue and Results: The following is an analysis of the Group’s revenue and results from continuing operations by reportable segments. Particulars Segment Revenue Segment Results Segment Revenue Segment Results For the For the For the For the Year ended Year ended Year ended Year ended March 31, 2020 March 31, 2020 March 31, 2019 March 31, 2019 Broadband Business (a) 567.69 (20.54) 527.63 42.01 Cable Television (b) 1,230.71 84.77 1030.66 (457.46) (a)+(b) 1,798.39 64.23 1558.29 (415.45) Less: Inter Segment revenue - - - - Total 1,798.39 64.23 1,558.29 (415.45) Add: Other un-allocable income 239.06 3.11 net of un-allocable expenditure Add: Share of profit/ (loss) of 32.65 6.58 associates and joint ventures Less: Finance Costs 226.37 220.80 Total 109.57 (626.56)
Hathway Cable and Datacom Limited Annual Report 2019-20 221 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Segment Assets & Liabilities Particulars As at As at March 31, 2020 March 31, 2019 Segment Assets Broadband Business (a) 3,988.41 1,044.84 Cable Television (b) 863.09 1,080.75 Total Segment Assets (a)+(b) 4,851.50 2,125.59 Unallocable 1,519.95 4,298.25 Consolidated Total Assets 6,371.45 6,423.84 Segment Liabilities Broadband Business (a) 1,135.57 267.76 Cable Television (b) 1,420.11 529.02 Total Segment Liabilities (a)+(b) 2,555.69 796.78 Unallocable 72.61 1,987.55 Consolidated Total Liabilities 2,628.30 2,784.33
Other Segment Information Other Segment Information As at March 31, 2020 As at March 31, 2019 Broadband Cable Total Broadband Cable Total Business Television Business Television Capital Expenditure Additions to Property, Plant & Equipment 159.83 96.55 256.38 127.54 65.01 192.55 Additions to Intangible assets 39.28 19.84 59.12 42.63 8.59 51.22 Material Non Cash items: Depreciation 92.29 142.12 234.41 94.01 177.52 271.53 Amortisation 16.89 21.57 38.46 9.06 20.71 29.77 Impairment during the year of Property, Plant and 43.02 55.21 98.23 12.84 38.27 51.11 Equipment / Intangibles Write down to Property Plant and Equipments - - - 8.93 60.91 69.83 Allowance for Doubtful Advances / impairment 5.92 0.77 6.69 49.74 284.18 333.92 in value of Investments / Impairment of trade receivables from Entities Under/ Joint Control and other Impairment on trade receivables during the year 3.03 86.26 89.29 2.40 18.63 21.03
222 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Information about Products and Services Revenue from external customers (Disaggregation of revenue from contracts with customers)
Product/Service As at March 31, 2020 As at March 31, 2019 Broadband Cable Total Broadband Cable Total Business Television Business Television Subscription Income 564.07 871.55 1,435.62 517.52 654.34 1,171.86 Placement and Carriage Income - - - - 287.14 287.14 Marketing and Promotional Income - 219.39 219.39 1.50 1.50 Broadcaster's Incentive Income - 73.33 73.33 - - - Activation Income (Set top Boxes) - 59.50 59.50 - 65.89 65.89 Other Operating Revenues 3.61 6.94 10.55 10.11 21.79 31.90
Information about Geographical Areas Since the group is domiciled in India and caters to domestic customers only, the disclosure requirements of information on geographical areas is not given.
4.16 Additional information as required under Schedule III to the Companies Act, 2013 of entites consolidated as Subsidiaries, Joint ventures and Associates March 31, 2020: Name of the entity in the group Net assets (total assets Share in profit or (loss) Share in other Share in total minus total liabilities) comprehensive income comprehensive income As % of Amount As % of Amount As % of Amount As % of Amount consolidated consolidated consolidated consolidated net assets profit or loss other total comprehensive comprehensive income income Parent 90.09% 3,372.91 4.83% 5.01 -344.68% 0.04 4.87% 5.05 Subsidiaries (Group’s share) Indian Hathway Bhawani Cabletel & Datacom -0.02% (0.65) 2.87% 2.98 232.38% (0.03) 2.85% 2.95 Limited* Hathway Digital Private Limited* -3.52% (131.75) 33.20% 34.43 70.31% (0.01) 33.19% 34.43 Hathway Broadband Private Limited 0.09% 3.38 0.07% 0.07 0.00% - 0.07% 0.07 Hathway Krishna Cable Private Limited -0.39% (14.59) 8.59% 8.91 0.00% - 8.59% 8.91 Bee Network and Communication Pvt Ltd -0.04% (1.34) 0.00% - 0.00% - 0.00% - Hathway Nashik Cable Network Pvt Ltd -0.28% (10.33) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway Kokan Crystal Cable Network -0.07% (2.52) -0.30% (0.32) -2329.39% 0.26 -0.06% (0.06) Private Limited Hathway Cnet Private Limited -0.01% (0.43) 0.00% 0.00 0.00% - 0.00% 0.00 Channels India Network Private Limited -0.04% (1.32) 0.00% - 0.00% - 0.00% - Hathway Enjoy Cable Network Pvt Ltd 0.00% 0.01 0.00% - 0.00% - 0.00% - Hathway JMD Farukhabad Cable Network 0.00% 0.00 0.00% - 0.00% - 0.00% - Pvt Ltd Chennai Cable Vision Network Pvt Ltd -0.05% (1.99) 0.00% - 0.00% - 0.00% - Hathway Media Vision Pvt Ltd -0.10% (3.67) -1.39% (1.44) 0.00% - -1.39% (1.44) Elite Cable Network Pvt Ltd 0.00% (0.02) 0.00% - 0.00% - 0.00% - Hathway United Cables Pvt Ltd 0.00% (0.16) 0.00% (0.00) 0.00% - 0.00% (0.00) UTN Cable Communications Pvt Ltd -0.62% (23.27) 7.17% 7.44 0.00% - 7.17% 7.44
Hathway Cable and Datacom Limited Annual Report 2019-20 223 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) Name of the entity in the group Net assets (total assets Share in profit or (loss) Share in other Share in total minus total liabilities) comprehensive income comprehensive income As % of Amount As % of Amount As % of Amount As % of Amount consolidated consolidated consolidated consolidated net assets profit or loss other total comprehensive comprehensive income income Hathway Space Vision Cabletel Pvt Ltd -0.03% (1.04) 0.00% - 0.00% - 0.00% - Hathway Gwalior Cable and Datacom Pvt Ltd -0.02% (0.58) 0.00% (0.00) 0.00% - 0.00% (0.00) Ideal Cables Pvt Ltd -0.02% (0.78) 0.00% (0.00) 0.00% - 0.00% (0.00) Binary Technology Transfers Pvt Ltd -0.04% (1.64) 0.00% - 0.00% - 0.00% - Hathway Internet Satellite Pvt Ltd -0.04% (1.63) 0.00% (0.00) 0.00% - 0.00% (0.00) ITV Interactive Media Pvt Ltd -0.01% (0.42) 0.00% - 0.00% - 0.00% - Liberty Media Vision Pvt Ltd -0.06% (2.27) 0.00% (0.00) 0.00% - 0.00% (0.00) Vision India Network Pvt Ltd -0.06% (2.06) 0.00% - 0.00% - 0.00% - Win Cable & Datacom Pvt.Ltd. -0.53% (19.70) -0.14% (0.15) 0.00% - -0.14% (0.15) Hathway Mantra Cable and Datacom Pvt Ltd -0.50% (18.56) 4.99% 5.17 0.00% - 4.99% 5.17 Hathway New Concept Cable and Datacom -0.09% (3.36) 0.57% 0.59 0.00% - 0.57% 0.59 Pvt Ltd Hathway Software Developers Pvt Ltd -0.39% (14.74) 3.44% 3.56 0.00% - 3.44% 3.56 Hathway Mysore Cable Network Pvt Ltd -0.53% (19.76) 5.83% 6.04 0.00% - 5.83% 6.04 Non-controlling interests in all 0.02% 0.90 0.00% 0.00% - 0.00% 0.00% subsidiaries Indian Joint ventures (Investment as per equity method) Hathway Cable MCN Nanded Pvt Ltd 0.01% 0.46 0.16% 0.16 0.00% - 0.16% 0.16 Hathway ICE Television Pvt Ltd -0.02% (0.60) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway Latur MCN Cable and Datacom 0.00% (0.17) -0.08% (0.08) 0.00% - -0.08% (0.08) Pvt Ltd Hathway Sai Star Cable and Datacom Pvt Ltd 0.29% 10.89 0.07% 0.07 0.00% - 0.07% 0.07 Hathway Sonali OM Crystal Cable Pvt Ltd 0.03% 1.10 1.06% 1.10 0.00% - 1.06% 1.10 (Refer Note 4.18) Net 9 Online Hathway Pvt Ltd 0.08% 3.07 0.03% 0.03 0.00% - 0.03% 0.03 Hathway Palampur Cable Network Pvt Ltd 0.00% - -0.06% (0.07) 0.00% - -0.06% (0.07) Hathway Prime Cable and Datacom Pvt Ltd 0.00% (0.18) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway MCN Pvt Ltd 0.14% 5.40 0.96% 1.00 83.51% (0.01) 0.95% 0.99 Hathway SS Cable & Datacom LLP -0.01% (0.49) -0.14% (0.14) 0.00% - -0.14% (0.14) Hathway Digital Saharanpur Cable and -0.08% (2.96) 0.00% (0.00) 0.00% - 0.00% (0.00) Datacom Pvt Ltd Hathway Channel 5 Cable and Datacom -0.01% (0.34) 0.00% (0.00) 0.00% - 0.00% (0.00) Pvt Ltd Hathway Dattatray Cable Network Pvt Ltd -0.08% (3.03) 0.33% 0.34 0.00% - 0.33% 0.34 Associate (Investment as per equity method) Indian Hathway VCN Cablenet Pvt Ltd 0.00% 0.00 0.00% 0.00 0.00% - 0.00% 0.00 Pan Cable Services Pvt Ltd 0.00% - 0.00% - 0.00% - 0.00% - GTPL Hathway Limited 16.89% 632.27 27.97% 29.01 2387.87% (0.26) 27.72% 28.75 (f.k.a. GTPL Hathway Pvt Ltd) * Total 100% 3,744.05 100% 103.73 100% (0.01) 100% 103.72 * Based on consolidated financial statement of the respective entities
224 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) March 31, 2019: Name of the entity in the group Net assets (total assets Share in profit or (loss) Share in other Share in total minus total liabilities) comprehensive income comprehensive income As % of Amount As % of Amount As % of Amount As % of Amount consolidated consolidated consolidated consolidated net assets profit or loss other total comprehensive comprehensive income income Parent 92.22% 3,356.70 -117.03% 219.51 74.02% 0.84 -118.19% 220.35 Subsidiaries (Group’s share) Indian Hathway Bhawani Cabletel and -0.07% (2.57) -0.01% 0.01 0.77% 0.01 -0.01% 0.02 Datacom Ltd* Hathway Digital Private Limited * -5.46% (198.49) 200.99% (376.99) 14.35% 0.16 202.12% (376.82) Hathway Broadband Pvt Ltd 0.09% 3.20 -0.10% 0.18 0.00% - -0.10% 0.18 Hathway Krishna Cable Pvt Ltd -0.38% (13.88) 3.67% (6.89) 0.00% - 3.69% (6.89) Bee Network and Communication Pvt Ltd -0.04% (1.34) 0.00% - 0.00% - 0.00% - Hathway Nashik Cable Network Pvt Ltd -0.28% (10.33) 0.02% (0.03) 0.00% - 0.02% (0.03) Hathway Kokan Crystal Cable -0.04% (1.47) 1.30% (2.43) 0.00% - 1.30% (2.43) Network Pvt Ltd Hathway Cnet Pvt Ltd -0.01% (0.43) 0.00% 0.00 0.00% - 0.00% 0.00 Channels India Network Pvt Ltd -0.04% (1.32) 0.00% - 0.00% - 0.00% - Hathway Enjoy Cable Network Pvt Ltd 0.00% 0.01 0.00% - 0.00% - 0.00% - Hathway JMD Farukhabad Cable Network 0.00% 0.00 0.00% - 0.00% - 0.00% - Pvt Ltd Chennai Cable Vision Network Pvt Ltd -0.05% (1.99) 0.00% - 0.00% - 0.00% - Hathway Media Vision Pvt Ltd -0.07% (2.54) 0.00% (0.00) 0.00% - 0.00% (0.00) Elite Cable Network Pvt Ltd 0.00% (0.02) 0.00% - 0.00% - 0.00% - Hathway United Cables Pvt Ltd 0.00% (0.16) 0.00% (0.00) 0.00% - 0.00% (0.00) UTN Cable Communications Pvt Ltd -0.61% (22.09) 3.69% (6.92) 0.00% - 3.71% (6.92) Hathway Space Vision Cabletel Pvt Ltd -0.03% (1.04) 0.00% - 0.00% - 0.00% - Hathway Gwalior Cable and Datacom Pvt -0.02% (0.58) 0.00% (0.00) 0.00% - 0.00% (0.00) Ltd Ideal Cables Pvt Ltd -0.02% (0.78) 0.00% (0.00) 0.00% - 0.00% (0.00) Binary Technology Transfers Pvt Ltd -0.04% (1.64) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway Internet Satellite Pvt Ltd -0.04% (1.63) 0.00% (0.00) 0.00% - 0.00% (0.00) ITV Interactive Media Pvt Ltd -0.01% (0.42) 0.00% - 0.00% - 0.00% - Liberty Media Vision Pvt Ltd -0.06% (2.27) 0.00% 0.00 0.00% - 0.00% 0.00 Vision India Network Pvt Ltd -0.06% (2.06) 0.00% - 0.00% - 0.00% - Win Cable & Datacom Pvt.Ltd. -0.54% (19.70) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway Mantra Cable and Datacom Pvt Ltd -0.51% (18.71) 3.17% (5.95) 0.00% - 3.19% (5.95) Hathway New Concept Cable and Datacom -0.02% (0.84) 0.39% (0.73) 0.00% - 0.39% (0.73) Pvt Ltd Hathway Software Developers Pvt Ltd -0.35% (12.60) 3.00% (5.63) 0.00% - 3.02% (5.63) Hathway Mysore Cable Network Pvt Ltd -0.53% (19.38) 2.99% (5.61) 0.00% - 3.01% (5.61)
Hathway Cable and Datacom Limited Annual Report 2019-20 225 CORPORATE OVERVIEW NOTICE DIRECTORS’ REPORT MANAGEMENT DISCUSSION and ANALYSIS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated)
Name of the entity in the group Net assets (total assets Share in profit or (loss) Share in other Share in total minus total liabilities) comprehensive income comprehensive income As % of Amount As % of Amount As % of Amount As % of Amount consolidated consolidated consolidated consolidated net assets profit or loss other total comprehensive comprehensive income income Non-controlling interests in all -0.02% (0.83) 0.00% - 0.00% - 0.00% - subsidiaries Indian Joint ventures (Investment as per equity method) Hathway Cable MCN Nanded Pvt Ltd 0.01% 0.30 0.01% (0.01) 0.00% - 0.01% (0.01) Hathway ICE Television Pvt Ltd -0.02% (0.60) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway Latur MCN Cable and Datacom 0.00% (0.09) 0.04% (0.07) 0.00% - 0.04% (0.07) Pvt Ltd Hathway Sai Star Cable and Datacom Pvt 0.28% 10.12 1.09% (2.04) 0.00% - 1.09% (2.04) Ltd Hathway Sonali OM Crystal Cable Pvt Ltd 0.00% - -1.99% 3.74 0.00% - -2.00% 3.74 (Refer Note 4.18) Net 9 Online Hathway Pvt Ltd 0.08% 3.05 -0.03% 0.06 1.34% 0.02 -0.04% 0.07 Hathway Palampur Cable Network Pvt Ltd 0.01% 0.19 0.03% (0.06) 0.00% - 0.03% (0.06) Hathway Prime Cable and Datacom Pvt Ltd 0.00% (0.18) 0.00% (0.00) 0.00% - 0.00% (0.00) Hathway MCN Pvt Ltd 0.12% 4.41 0.43% (0.81) 0.00% - 0.44% (0.81) Hathway SS Cable & Datacom LLP -0.01% (0.35) 0.11% (0.20) 0.00% - 0.11% (0.20) Hathway Digital Saharanpur Cable and -0.08% (2.96) 0.02% (0.03) 0.00% - 0.02% (0.03) Datacom Pvt Ltd Hathway Channel 5 Cable and Datacom -0.01% (0.34) 0.00% (0.01) 0.00% - 0.00% (0.01) Pvt Ltd Hathway Dattatray Cable Network Pvt Ltd -0.09% (3.37) -0.26% 0.49 0.00% - -0.26% 0.49 Associate (Investment as per equity method) Indian Hathway VCN Cablenet Pvt Ltd 0.00% - 0.00% - 0.00% - 0.00% - Pan Cable Services Pvt Ltd 0.00% - 0.00% - 0.00% - 0.00% - GTPL Hathway Limited 16.70% 607.69 -1.52% 2.85 9.51% 0.11 -1.59% 2.96 (f.k.a. GTPL Hathway Pvt Ltd) * Total 100.00% 3,638.67 100% (187.57) 100.00% 1.13 100.00% (186.44)
* Based on consolidated financial statement of the respective entities
4.17 Subsequent to the outbreak of Coronavirus (COVID -19) and consequential lock down across the country, the Group has continued to operate and provide internet and cable television services to its customers, which has been declared as an essential service, without any disruptions. However, disruptions to businesses worldwide and economic slowdown may have its eventual impact on the Group. A definitive assessment of the impact is not possible in view of the highly uncertain economic environment and the scenario is still evolving. The Group has evaluated its liquidity position and of recoverability and carrying values of its assets and have concluded that no material adjustments required at this stage in the consolidated financial statement.
226 Hathway Cable and Datacom Limited Annual Report 2019-20 REPORT ON STANDALONE CONSOLIDATED CORPORATE GOVERNANCE FINANCIAL STATEMENTS FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements for the year ended March 31, 2020 (` in Crores unless otherwise stated) 4.18 note on Consolidation of Joint Venture based on management accounts The Company holds 68% in one of its joint venture namely Hathway Sonali Om Crystal Cable Private Limited In the absence of availability of the Audited financials for the purposes of consolidation, Consolidated Financial Statement for the financial year ended as at March 31, 2020 was prepared by considering the Management Accounts of this joint venture.
4.19 The Board of Directors of the Company at its meeting held on February 17, 2020, has approved a Composite Scheme of Amalgamation and Arrangement involving the Company (Hathway), Den Networks Limited (Den), Network18 Media & Investments Limited (Network18), TV18 Broadcast Limited (TV18), Media18 Distribution Services Limited (Cable Co.), Web18 Digital Services Limited (ISP Co.) and Digital18 Media Limited (Digital Co.) and their respective shareholders and creditors (“Scheme”). The Scheme provides for amalgamation of Hathway, Den and TV18 with Network 18 and subsequent consolidation of Cable, ISP and Digital businesses of the amalagamating companies by way of transfer of relevant undertakings to the respective companies. On amalgamation, the shareholders of Hathway will be issued shares of Network 18. The appointed date of the Scheme is February 1, 2020, however, it will take effect upon receipt of requisite approvals and fulfilment of conditions stated in the Scheme. Pending the Scheme coming into force, no effect of the same have been considered in this consolidated financial statement. 4.20 Previous year’s figures have been reclassified/regrouped wherever necessary.
As per our report of even date For and on behalf of the Board For Nayan Parikh & Co. Chartered Accountants Firm’s Registration No: 107023W (Saurabh Sancheti) (Rajan Gupta) Director Managing Director DIN: 08349457 DIN: 07603128
(K.Y.Narayana) (Ajay Singh) (Sitendu Nagchaudhuri) Partner Head Corporate Legal, Company Secretary Chief Financial Officer Membership No: 060639 & Chief Compliance Officer FCS - 5189 Place: Mumbai Place: Mumbai Date: April 23, 2020 Date: April 23, 2020
Hathway Cable and Datacom Limited Annual Report 2019-20 227 Notes
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Hathway Cable and Datacom Limited www.hathway.com Toll Free No. 1800-221-119